New Zealand's biggest housing market continues to fall, with other major centres softening but the regions still seeing healthy growth. According to May figures from Quotable Value, the average home value in Auckland fell by -1.9 per cent over the last six months, which is fairly consistent with recent declines at -2.1 per cent for the year. Other major centres were struggling but still up over 12 months, with regional centres experiencing stronger growth as New Zealand becomes a three-speed property market.
According to the QV House Price Index, the average price for a home in Auckland was $1,030,439 in May this year, dropping from $1,050,647 in November last year. The biggest drop was on the North Shore at -3.9 per cent over the year, followed by central Auckland at -2.6 per cent, Waitakere at -1.4 per cent, and Manukau at -0.8 per cent. A number of upmarket suburbs have seen steep declines, including Remuera, Epsom, Mt Eden, Grey Lynn, Ponsonby, Herne Bay, and Mt Albert. Suburbs north and south of the city centre were more resilient to the downturn, with Franklin managing positive growth at 1 per cent, Papakura up at 0.7 per cent, and Rodney seeing 0.6 per cent growth.
Around the country, price growth was subdued but well and truly in positive territory. Invercargill was leading the way with price growth of 13.5 per cent, followed by Dunedin at 11.5 per cent, Wellington at 7.8 percent, Tauranga at 5.9 per cent, Hamilton at 4.9 per cent, and Christchurch at 0.7 per cent. In order to get an accurate picture of the property market, however, you need to look at quarterly results. Changes over three months show a much more subdued picture, with Auckland down -1.4 per cent, Wellington up 1 per cent, Hamilton up 0.8 per cent, Christchurch up 0.7 per cent, and New Zealand as a whole growing by just 0.1 per cent.
According to QV Senior Consultant Paul McCorry, "Our major centres are seeing the market soften, with Auckland continuing to record single digit negative growth over the quarter and the capital city seeing values plateau over the last three months... At the same time, many regional centres are still very much in the upward stage of their growth cycle, and continue to achieve strong yearly and quarterly value increases. These areas, which are generally more affordable such as Whanganui, Manawatu and Palmerston North, continue to attract plenty of buyer demand."
Construction activity is also slowing across the country, with just 2605 dwelling consents issued nationwide for April, and 1043 for Auckland. Both of these numbers were down from the month before, at 2729 and 1163 respectively. The most recent ANZ Business Outlook Survey showed the weakest outlook for residential construction intentions in a decade, with construction activity reaching a peak in some areas. While the price downturn in Auckland is far from over, and other New Zealand capitals will go along for the ride, rising population growth and low supply levels will provide some upward pressure to the market in the months ahead.
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