Momentum loss evident
Recent CoreLogic NZ data indicated a slowing in the New Zealand property market, with falling values in a significant number of suburbs over the last quarter.
CoreLogic NZ’s latest analysis showed a mixed landscape, with some areas experiencing declines while others continue to see growth.
According to CoreLogic NZ’s Mapping the Market tool, out of 938 suburbs analysed, 221 have experienced a decline in property values of at least 1% in the three months leading up to June, with some suburbs seeing decreases as high as 5-9%.
“On the higher end, Takapuna in Auckland, and Onemana and Tairua in Thames Coromandel saw value drops of 5-6%,” said Kelvin Davidson (pictured above), chief property economist at CoreLogic NZ. “Suburbs within more affordable price points like Fordlands in Rotorua and Mataura in Gore District saw values fall by 7-9%.”
Regional overview
Despite the general slowdown, 253 suburbs nationwide reported value increases of at least 1% during the same period.
Davidson highlighted positive trends on the West Coast, where Cobden and Runanga in Grey District topped the growth charts with increases of 16.9% and 13.1%, respectively, maintaining median values around or below $300,000.
Major centres analysis
- Auckland: The city’s property market is cooling, with 86 of 199 suburbs declining by at least 1% since March. However, annual trends still show some areas with rising median values.
- Hamilton: Property values in Hamilton have slowed recently, despite a strong performance over the past year.
- Tauranga: Mixed results with some suburbs showing significant gains while others declined.
- Wellington: Has experienced substantial growth over the past year but has seen a slowdown in recent months.
- Christchurch and Dunedin: Both cities showed strength annually, but signs of cooling were evident in the last quarter.
Factors influencing the property market
Davidson reflected on the broader factors influencing the market.
“The turnaround in property values over the past 12 months reflects factors such as the relative resilience of the labour market over that period, and strong net migration,” he said. “The more recent loss of momentum tends to reflect continued affordability pressures and high mortgage rates, the rise in listings on the market, and a turning point for unemployment.”
CoreLogic NZ on outlook for 2024
Looking ahead, the outlook remains cautious.
“Tax cuts and looser LVR rules may not boost activity or prices very much in an environment where mortgage rates remain high, although the removal of first home grants and the introduction of DTI limits might not necessarily undermine the market greatly either,” Davidson said.
“All in all, the latest suburb-level figures confirm the market’s recent loss of momentum, and 2024 remains on track to be a pretty subdued year.”
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