Kelvin Davidson

PHOTO: Kelvin Davidson, Chief Property Economist at CoreLogic NZ

Indications of a Shift in New Zealand’s Property Market are on the Rise

In Aotearoa New Zealand, a growing number of neighborhoods are witnessing an upswing in home values over the past three months, signaling a potential turning point in the property market. According to the recently updated Mapping the Market tool by CoreLogic NZ, out of the 924 neighborhoods analyzed nationwide, 269 have experienced a rise in property values during the three months leading up to September. This number has more than doubled compared to the 114 neighborhoods where values increased during the preceding three months ending in June.

Kelvin Davidson, Chief Property Economist at CoreLogic NZ, pointed out that the shift becomes more evident when using the quarterly measure, which is more timely than the slower-moving annual comparison. In June, 71 suburbs had seen a rise of at least 0.5% in the previous three months, but by September, this figure had surged to 188.

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Among the strongest-performing markets, 29 suburbs have witnessed property values increase by at least 2% since June, with 13 of them in Auckland and four in Wellington City. Christchurch is also showing signs of a new growth cycle, with 14 suburbs in the city experiencing a rise of at least 1% since June.

Looking back over the past 12 months, only 47 suburbs saw an increase in property values, with Karoro, Lower Shotover, and Blaketown being the top performers, with values rising between 5-7%. In contrast, 877 suburbs recorded a decline in values, with 257 of those suburbs experiencing a decrease of at least 10%.

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Property Trends:

Auckland: Signs of growth are re-emerging in Auckland, with 76 suburbs experiencing an increase in values over the past three months. Herald Island, Maraetai, and Mellons Bay led the way with a 3% increase each. However, property values declined in the remaining 123 suburbs analyzed. Herne Bay remains Auckland’s priciest suburb with a median value of $3.2 million, while Auckland Central is the most affordable at $520,200.

Hamilton: In Hamilton, median values increased in 11 out of the 34 analyzed suburbs, with Fitzroy being the strongest performer with 1% quarterly growth. Values in Baverstock remained unchanged over the past three months, while Rototuna was the weakest suburb with a -1.7% change. Harrowfield is Hamilton’s most expensive suburb, with a median value of $1.07 million, while Bader is the cheapest at approximately $578,000.

Tauranga: Tauranga is showing signs of a potential trough, with six out of the 14 suburbs analyzed either experiencing flat or rising property values since June. Ohauiti led the way with a 0.6% increase. Mount Maunganui is the most expensive suburb, with a median value of $1.33 million, while Parkvale is the most affordable at $640,050.

Wellington: In Wellington, values remained flat or increased in 27 areas out of the 96 suburbs analyzed. Ten suburbs saw values rise by at least 1%, including Newlands and Maupuia, which both experienced a 2% increase. Wellington still has 21 suburbs with median values exceeding $1 million, with Seatoun being the most expensive at $1.69 million, and Wellington Central being the most affordable at $461,900.

Christchurch: Christchurch is also displaying signs of a turning point, with 50 suburbs experiencing flat or rising property values since June. Fourteen suburbs have seen their values increase by at least 1%, with Hillmorton leading the way with nearly a 3% increase. Scarborough is the most expensive suburb at $1.72 million, while Phillipstown is the cheapest at $447,050.

Dunedin: Among the main centers, Dunedin is the weakest, with only two out of 60 analyzed suburbs experiencing flat property values. Opoho and Liberton saw values rise by 0.1% each over the quarter, while value declines ranged from a minor 0.1% dip in Macandrew Bay to a larger 4.4% fall in Kaikorai. Maori Hill and Vauxhall, which both had median values above $1 million a year ago, have now fallen below that threshold, with Maori Hill being the most expensive at $952,700. South Dunedin is the most affordable at sub-$400,000.

Property Market Forecast:

Kelvin Davidson noted that while the latest data confirms the depth and breadth of the property value downturn over the past year, the signs of a turning point are becoming increasingly evident in recent months. This shift is attributed to factors such as a peak in mortgage rates, high net migration, a robust labor market, and relaxed credit rules. However, he also emphasized that the next phase is expected to be restrained by factors such as poor affordability, persistently high mortgage rates, and limits on debt-to-income ratios, even though a National election victory and changes in housing policies may provide an additional boost to property values.