Values on the rise again - CoreLogic

CoreLogic's Nick Goodall

According to the latest CoreLogic House Price Index, nationwide property values were up by 0.8% - to a national average of $743,678 - over the three months to September.

That’s as compared to last month’s index which had them down by 0.2% in the three months to August.

They were also up by a healthy 7.6% year-on-year nationally. 

The lift in values on a nationwide level was also generally evident across the six main centres in September.

See the CoreLogic index results as at 30 September 2020 here.

Tauranga was the only exception with a minor drop of 0.3% (to an average value of $795,182) in September is very minor.

Auckland property values experienced its first value increase since Covid hit. It was up by 0.5% over the month, which left its average value at $1,078,326.

However, the SuperCity was the weakest performing of the main centres over the three months to September 2020 (down by 0.4%).

In contrast, Hamilton was the best performing main centre over the quarter, up by 3.2% to an average value of $647,777, and it also saw consistent growth of 9.7% over the last year.

In the provinces, growth was also the order of the month, with Rotorua (up 5.2%), Palmerston North (up 4.4%) and even New Plymouth (up 3.4%) seeing quarterly values go from strength to strength.

Queenstown values have dropped away a total of 7.4% from earlier in the year, but the first signs of a potential trough are emerging. The city’s values are now at a similar level to April 2018.

But recent strong performer Invercargill saw a monthly drop of 0.7% (to an average value of $360,388) which made it the only province to see a negative symbol in front of its percentage.

CoreLogic head of research Nick Goodall says values have held firm through the worst of the Covid-prompted economic downturn.

“The combination of low interest rates, access to credit and renewed confidence has seen demand hold firm. Limited available supply, in the form of a low number of for-sale listings remains a key contributor to the property market’s resilience to lower values.”

Further, to date, the absence of any meaningful lift in unemployment has minimised the number of urgent listings or strongly motivated vendors willing to discount their price, he says.

While lockdown 2.0 in August posed a treat to the market, particularly in Auckland, it seems that activity is now back to normal.

Goodall says the perceived safety of property, and availability of cheap money, appears to be protecting the property market from falling though – as does the lack of stressed sales.

But the data shows that, overall, September was another month of resilience in the property market, with activity and values holding up, or even increasing further.

“The likelihood of rising unemployment is a factor to watch, but for now the key drivers remain ultra-low mortgage rates and the tight supply of available listings.”