Price forecasts revealed
The housing market has experienced a mini-bounce in October 2021, with values up by 2.1%, according to the latest CoreLogic House Price Index (Index).
The rise in prices last month was a slight increase from September's monthly growth rate of 1.4% and the first time in six months that price growth accelerated.
In Auckland city, property values jumped a further 2.6% in October, taking the annual growth rate to 26.3%, yet another record.
In Tauranga, the average property price increased by 4.3% during the same month and 9.7% over the last three months – the fastest quarterly growth rate among the main centres.
In Christchurch, the annual rate of growth of 31.9% is the strongest on record. With values increasing by 4.1% in October and 7.6% over the last three months, the average property value in the city is now $693,864 – which takes it above the average value of $683,060 in Dunedin for the first time since November 2019 when Dunedin overtook the Christchurch property market.
Meanwhile, in Wellington, the average property value now exceeds $1.1 million, an increase of 36.1% over the last 12 months (or $292,501), yet another record.
By contrast, value growth in Hamilton slowed slightly during the same month (3.7%). However, the city's monthly figure has been relatively volatile recently, and the September rate of growth (5.2%) was unlikely to be sustained.
CoreLogic found slightly mixed results across the main urban areas, with the average value in New Plymouth having dropped by -1.6% last month.
During the same month, the growth rate slowed but remained positive in each of Rotorua, Queenstown, Porirua, Kapiti Coast, and Hastings. Additionally, a quarterly growth of 10.2% in Queenstown took the average property value beyond $1.5 million – the most expensive in the country.
Meanwhile, the annual rate of growth in Hastings and Napier hit record-breaking levels of 41.9% and 39.4%, respectively. Likewise, the annual rates of growth record were set in Kapiti Coast (39.3%) and Lower Hutt (39.0%).
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CoreLogic NZ head of research Nick Goodall said the acceleration in the monthly price growth rate could be linked to factors related to the COVID-19 Delta outbreak, including a renewed tightening of advertised supply while demand for housing remained high.
“Aotearoa's Alert Level 4 settings, which were enforced nationwide for two weeks on August 18 and lasted for five weeks in Auckland, had a noticeable impact on total listings,” Goodall added.
“Already low levels of supply dropped further during this time, and while inventory levels have since started to recover, advertised supply is likely lower now than otherwise may have been, which would have placed renewed upwards pressure on prices.”
As the end of 2021 approaches, Goodall advised borrowers and property owners to prepare for increasing costs of homeownership and other living costs.
“Regulation is also unlikely to go away as affordability continues to worsen and the property market remains a politically sensitive topic,” he added.
CoreLogic economists aired the same thoughts in the CoreLogic NZ Quarterly Market Update released last month, adding that they expect the New Zealand property market to see sky-high construction costs and higher mortgage rates next year, with further regulation impossible to rule out.
