Patchy housing market shows widespread falls as well as some increases

The rises are unexpected as the housing market downturn spreads across the country rapidly.

The suburbs that still have rising prices of 5% or more tend to be in smaller areas, including parts of Waikato District, Far North, Southland District, Central Otago District, but also a handful in main centres – Beerescourt and Baverstock in Hamilton, Wiri in Auckland, as well as Luggate in Queenstown Lakes District.

CoreLogic’s interactive Mapping the Market tool, updated quarterly shows just under 300 suburbs had values increase by at least 1% since March, with 23 having gains of more than 5%.

However, the market downturn has become widespread with 486 suburbs recording a fall in prices over the past three months, almost double the 246 suburbs that fell in value in the preceding three-month period.

CoreLogic chief property economist Kelvin Davidson says the signs of weakness are clear.

“At the headline level, 323 suburbs have had values drop by at least 1% over the past three months, with another 163 suburbs recording value falls of less than 1% meaning a touch more than half -51% - of all suburbs have now entered a downswing.

“When looking at the largest value falls, 11 suburbs declined by 5% or more, including parts of Auckland, Dunedin, Upper Hutt, Lower Hutt, and Porirua. In dollar terms, the largest drop in the last three months has been in Auckland’s Point Chevalier where the median value fell $104,400, a 4.6% fall,” says Davidson.

He says there’s evidence of volatility across the New Zealand market, and CoreLogic will have a clearer picture of which suburbs have been impacted the most in the coming months. “What is clear is that value falls are now fairly broad-based, both geographically and by value band/tier.”

Auckland
More than half of Auckland’s suburbs have had median property values fall by at least 1% – that’s 119 from 206. Another 36 have had drops of less than 1%. On the flipside, only 24 have had median values rise by at least 1% since March. Davidson says along with Point Chevalier, Pakuranga Heights and New Windsor also had median values fall by at least $90,000 in the past three months. Herne Bay is still Auckland’s most expensive suburb, albeit values have dipped 1% since March. Only 28 suburbs from greater Auckland’s 276 now have average prices under $1 million.

Hamilton
Hamilton has had more than 50% of its suburbs drop in value by 1% or more, with Hamilton Lake, Hillcrest, and Flagstaff down more than 4%. By contrast, the prime riverside suburb of Beerescourt and Baverstock have seen increases of more than 5%.Flagstaff is still Hamilton’s most expensive suburb with a median value of $1.15m, but Huntington is only a touch lower.

Tauranga
“Tauranga’s market is still holding up a bit better than elsewhere,” says Davidson. “Only Parkvale and Gate Pa have seen falls of 1% or more since March. Areas such as Tauranga (suburb) and Papamoa have continued to rise by 2% in the past three months.” Mount Maunganui, Matua, and Papamoa Beach are still the city’s most expensive suburbs, albeit each have seen values dip a fraction since March.

Wellington
In the capital, the emerging weakness of the wider Wellington property market is clear to see at suburb level. Only Lyall Bay and Wellington Central have recorded gains of 1% or more since March. By contrast, 64 out of 97 suburbs had falls of at least 1%, with five having drops of at least 5%, including Petone and Alicetown. Seatoun remains the most expensive suburb at $2.13m median value, although this is 1.3% down from March. Roseneath, Wadestown, and Days Bay are other expensive parts of Wellington to have had falls in median values in the past quarter.Only seven from Wellington’s 56 suburbs had average property prices under $1 million.

Christchurch
The Garden City’s property market has generally been resilient in recent months, with only four from 85 suburbs having median values drop by 1% or more since March, including Kennedys Bush and Beckenham. By contrast, 31 suburbs have had values continue to grow by at least 1% in the past three months. Scarborough is the city’s priciest suburb, at a median value of $1.64m.

Dunedin
Dunedin’s market has definitely turned down, with 45 from 62 suburbs having had median values drop by at least 1% since March, with The Glen dropping 5.4%  and Brockville declining by 5.7% the weakest. Maori Hill and East Taieri still have median values of $1m or more.

Further to fall
Meanwhile, independent economist Tony Alexander says the country is about half way through the market tanking and prices could fall by about 15% below their November peak.

He says before the middle of next year prices might hit the bottom, but the timing vary from region to region. 

Alexander says vendors are increasingly willing to negotiate and accept contract conditions, so now is a good time to buy, unless purchasers let fear to over-paying (FOOP) muddle their thinking.

The main winners in this market, he says, will be investors and cashed-up buyers as many other purchasers cannot get finance because of rising interest rates and the tighter lending rules from the CCCFA changes, which has loosened off a bit, but not enough according to most lenders.