But worst over for most areas, economist says
The New Zealand property market downswing has continued, albeit unpredictably, as property price falls across the motu accelerated in June.
CoreLogic’s house price index showed the monthly rate of decline accelerated to 1.2%, compared to the 0.7% fall in May, led by weaker figures in Auckland, down 3% in June, with four of NZ’s six main centres recording larger falls last month.
The decline takes the national annual rate of change 10.6% below the same period the previous year, down from -10.2% in May.
Nick Goodall (pictured above), CoreLogic NZ head of research, said the acceleration showed the impact of “a long and strong rate hiking cycle as stretched mortgage affordability continues to constrain demand.”
Despite the series of declines that has wiped $130,000 off the nationwide average house value, values were still up $183,000 compared to the pre-COVID level in March 2020, “illustrating just how strong the pandemic-induced growth upswing was.”
CoreLogic’s HPI showed Auckland leading the decline in property values with a 3% fall in June, while the other five main centres saw value shifts of not more than 0.6% either way.
Values in Christchurch and Tauranga climbed 0.3% and 0.1%, respectively, in the month.
In Dunedin, there was very little movement in property values over three consecutive months, leaving the quarterly change at -0.4%. Similarly, Christchurch values have generally held relatively firm at -0.5% over the June quarter, and are down “only” 6.5% annually, making it the best-performing main centre over the year.
In both Wellington and Hamilton, values continued to post modest falls at -06% and 0.2%, respectively.
Goodall said the latest data may be a speed bump for expectations that the housing downturn may have already ended, though the variable results across the country likely signal that a housing market trough is close at hand.
“Rather than focus too much on the exact timing of the bottom of the market, we believe it’s more about assessing the key market drivers and recent changes in those drivers, when setting expectations of where the market is headed,” he said.
Goodall added that inconsistency has been the consistent trend for house prices in 2023, with the monthly rate of change regularly dipping and recovering in back-to-back months.
“It’s just as easy to find pockets of high demand and strong sales as it is to find a property which has been languishing on the market before being discounted,” Goodall said. “What the data is telling us is that housing market conditions remain diverse. While some markets may be moving through a trough in the cycle, others may have further to decline.
“Nonetheless, we still believe it appears the worst of the downturn is generally over for most areas.”
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