Stalled recovery: the suburbs with big house price falls

Thursday, 13 June 2024

House prices fell by at least 1% in over 200 suburbs over the last three months, CoreLogic analysis shows.

House prices in 10 suburbs fell by over 5% over recent months, and it shows the market recovery has lost momentum, CoreLogic says.

The property research company has released its latest suburb price mapping figures, and they reveal prices dropped over the three months to June in 436 of the 938 suburbs analysed.

While a portion of the falls were below 0.1 and negligible, 221 of the suburbs had price falls of at least 1%, and the 10 biggest falls were at 5% or more.

In contrast, CoreLogic’s last suburb analysis showed that only six suburbs had falls of over 4%, and the biggest fall was 5% in Napier’s Bay View.

Fordlands in Rotorua had the biggest decline this time, with a 8.77% fall to an average of $348,900 from $382,450 in the last analysis. Its prices were down 4% annually from $363,250 at the same time last year.

Fordlands in Rotorua had the biggest decline, with a 8.77% fall to an average of $348,900.

Matura in Gore, down 7.20% to $266,000; Te Puru and Tairua in Thames/Coromandel, down 7.06% and 5.86% to $816,150 and $1.03 million respectively; and Ascot Park in Porirua, down 5.68% to $668,6000 rounded out the bottom five.

Coromandel in Thames/Coromandel, Whangarei Heads in Whangarei, Selwyn Heights in Rotorua, and Onemana in Thames/Coromandel had falls ranging between 5.27% and 5.07% which left their average prices at $702,500, $982,250, $485,250, and $1.09m.

Takapuna in Auckland sat just below the 5% mark, with a 4.99% fall to an average of $1.96m.

CoreLogic chief property economist Kelvin Davidson said there had been a decline in prices across a range of suburbs, and it affected expensive and cheap areas, and the North and South Island.

It illustrated the widespread dip in pricing momentum, and that the market recovery was losing steam, he said.

The housing market recovery is losing steam, CoreLogic’s Kelvin Davidson says.

“At a quarterly level price movements can be volatile, so a suburb can be up one quarter and down the next, so I’m reluctant to say we are heading into another downturn.

“But the message is that the market is slowing, and that’s backed up by the data from our wider house price index, which had the average national house price dipping 0.2% in May.”

CoreLogic’s suburb analysis is based on its automated valuation model, rather than sale prices which are used in its monthly index.

But each data set told a similar story, and that story was also supported by Trade Me Property’s latest asking price figures, released on Wednesday.

They showed the average national asking price for properties listed on the website fell 2.3% to $857,800 in May, from $878,100 the month before.

Auckland’s Herne Bay remains the country’s most expensive suburb with an average price of $3.41 million.

It was the second month in a row the national price declined, and on a monthly basis prices also fell in every region except Gisborne.

In Auckland and Wellington the regional averages fell 2.3% and 2% to $1.05m and $829,400 respectively, while prices in Canterbury dipped just 0.2% to an average of $710,150.

Davidson said the softness in prices was not surprising as mortgage rates remained high, affordability was still an issue, and it was hard to get credit for many buyers.

There had also been a noticeable rise in listings on the market, and the labour market had weakened, he said.

“That means the pool of people who are able to buy is smaller, and because it is a buyers’ market they have a lot of choice and the pricing power.”

But it was worth pointing out that not all suburbs had price declines over the last three months, he said.

The analysis showed 253 suburbs had price increases of at least 1%, and in eight of them prices were up 5% or more. Muriwai in Auckland and Matarangi in Thames/Coromandel had the biggest increases at 9.8% and 8.31%.

Herne Bay remained the country, and Auckland’s, most expensive suburb with a median price of $3.41m.

Seatoun was the Wellington region’s most expensive suburb with a median of $1.74m, while Kennedys Bush was the priciest suburb in Christchurch at $1.71m.

Davidson said overall many suburbs had seen a recovery since the troughs in the first half of 2022, it was just the market was now more subdued again.

But the conditions were still there for a turnaround next year when interest rates were expected to fall, the bright line test period was reduced, and interest deductibility returned, he said.