Some 776 of the 948 NZ suburbs analysed had a drop in median values in the past three months
Only a handful of suburbs have defied the property market downturn in New Zealand, as prices continued to tumble across most parts of the country in the past three months.
The latest update of CoreLogic NZ’s interactive Mapping the Market Tool showed that 776 of the 948 NZ suburbs analysed had a drop in median values between September and December, with the suburb of Kawakawa in the country’s Far North District recording the highest percentage growth rate, up 6.5% to a median of $469,550.
Posting the highest dollar increase for the quarter, meanwhile, were Arrowtown and Lower Shotover, both in the South Island’s Queenstown-Lakes District, which rose 4.9% and 4.8%, equivalent to $102,750 and $74,500 on average, respectively.
Kelvin Davidson, CoreLogic NZ’s chief property economist, said only 66 suburbs, or about 7%, recorded a growth rate of 1% or more in the past three months, with many of those located in the country’s rural and more affordable southern districts.
“These figures are the culmination of the lagged impact of rate rises, record inflation, and other economic influences having an impact on the market,” Davidson said. “We knew it was coming and it’s been interesting to see it play out, with downward momentum widespread, but almost universal in our city centres with few areas able to escape the weakness.”
Over the past quarter, 90% of Auckland suburbs, that’s 180 of 201, have seen their median property value decline, with 73 of those suburbs falling at least -2%. On the other hand, only eight saw a rise of 1% or more.
Across the country, 56 suburbs posted a fall in median value of 5% or more, with Korokoro in Lower Hutt City and Mangakino in the Taupo District seeing the largest declines, at -10.2% and -10.7%, respectively.
Davidson expects clear challenges to NZ’s economy and property market in 2023, with the country’s labour market and mortgage rates potentially the key drivers again, as they have been this year.
“The general outlook for the housing market remains weak, especially in light of the Reserve Bank’s predictions that the economy will enter a recession,” he said. “Inflation is not expected to begin easing until the second half of next year and the official cash rate and unemployment levels will both increase. It’s a tricky combination for the property market and homeowners alike. However, if large-scale job losses can be avoided, further falls in property values may be contained and possibly plateau in the second half of 2023. But pessimism would take over if employment did start to fall more sharply.”
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