Quotable Value Ltd’s rolling 3- & 12-monthly residential index readings for the Auckland region showed the overall slide in the region’s property values continued in July, although the picture is not uniform and it doesn’t show in the graph above.
The graph shows a quite different story when the index is taken back to a 2003 starting point – neck & neck at the top of value gain are Auckland & Hamilton. QV’s figures, back to late 2007, show Auckland up 92% since then and Hamilton up 55%.
Back to the latest figures: Somehow Auckland City (the isthmus – QV is still working on the pre-2011 boundaries) managed a quarterly uplift, improving from a 0.3% gain over 12 months to a 0.5% gain for the last 3 months, although only the southern suburbs on the isthmus turned around, going from a 0.1% decline over 12 months to a 1.2% rise in the last 3 months.
The one other part of the region to pick up value was Manukau east, going from a 1.2% decline over 12 months to zero movement for the last quarter.
For the rest of the region’s indexes, the values for the last 3 months showed a decline from the 12-month figures, or a standstill, but it’s not all downward.
2 years ago, the Auckland City index registered an 86.9% gain since the end of the pre-global financial crisis boom in late 2007. By last Christmas, it was hovering just above a 100% gain (sitting on 100.1%), but dropped to 99% in February, leaving 2 areas in the region with +100% gains over the 10 years – those southern suburbs on 105.1% and north-west Manukau on 111.6%.
Around the country, some places have shown strong value increases over the last 3 or 12 months, but generally the long-term value increases have been much lower than in Auckland.
QV said in its monthly assessment: “Lower value, more affordable properties are selling at a faster rate, due to continued demand from first-homebuyers. Our analysis shows that most property transactions are taking place at the low-to-medium price bracket, a section of the market where value growth remains comparatively strong despite relatively static average house values across the country.”
The index showed nationwide residential property values for July increased 5.1% over the last year, but fell 0.7% over the last 3 months. The nationwide average value is now $673,797. Adjusted for inflation, the nationwide annual increase fell to 3.5%.
The index for the Auckland region rose 0.6% over 12 months, but fell 0.9% when adjusted for inflation.
QV general manager David Nagel said first-homebuyer activity remained relatively strong in most of New Zealand, but had fallen in some areas in recent months: “This could possibly be due to the fact that some buyers are holding off purchasing, hoping they’ll attain a KiwiBuild property in the ballot.”
As for residential investors, Mr Nagel said: “Dunedin continues to buck the trend, with investors accounting for a growing portion of buyers, according to the latest Core Logic buyer classification data. With an average value of $411,669, investors are attracted by relatively low values & strong yields. Investor activity has dropped over most our main centres, partly due to the bank’s LVR (loan:value ratio) restrictions and a period of consolidation after recent growth.
“With overall market conditions remaining strong, such as record low interest rates & strong local economies, I would anticipate that values will remain fairly stable for the remainder of winter.”
Auckland entry-level properties still selling
In Auckland, senior QV consultant James Steele said: “A return to ‘normal’ market conditions continues as values remain stable under depressed levels of activity.
“Despite the fact that investor activity has dropped, entry-level properties, especially those which are well presented & under $650,000, continue to transact in a market experiencing depressed levels of activity. This is understandable given the current affordability challenges & built-up demand from first-homebuyers.
“We’re continuing to see a high proportion of properties come to market as price by negotiation as opposed to auction, largely due to reduced demand created by stricter lending conditions.
“With less demand, sellers are adjusting expectations and are more open to negotiation in order to get their property sold. In general, this has limited the value growth seen over the previous period and kept prices stable, with some softening occurring in properties which have issues or are poorly presented.”
“Well presented properties which offer a good family living environment, or those which have straightforward development potential, are still transacting at reasonable levels. However, demand is patchy and timing – together with supply in any given suburb – is playing a large part. The premiums paid prior to the 2016 LVR restrictions are rarely found under current conditions.
“Over the coming months, we anticipate the continuation of the ‘normalised’ market conditions experienced over the past year, and expect minor fluctuations in price through the winter months coming from those under pressure to sell. At this stage, any further downward pressure on property prices is likely to come from regulatory change or wider economic risks.”
Below, the dollar figure is the average value for July. The first percentage is for the 3 months to July, the second is for the last 12 months (QV switches those around in its tables) and the third is the change since the 2007 peak. For Auckland, QV still works on the old council boundaries (councils marked in bold); Kaipara and the Hauraki Gulf Islands, as usual, have low counts:
Auckland region, $1,050,778, -0.1%, 0.6%, 92.3%
Rodney, $947,336, -1.1%, -0.2%, 61.5%
North, $968,829, -0.9%, -0.3%, 61.3%
Hibiscus Coast, $926,604, -1.4%, -0.1%, 57.8%
North Shore, $1,224,301, -0.7%, 1.8%, 89.7%
Coastal, $1,399,765, -1.3%, 1.4%, 85.8%
Onewa, $971,037, 0.0%, 2.0%, 95.8%
North Harbour, $1,209,171, -0.4%, 2.4%, 99.0%
Waitakere, $824,055, -0.1%, 0.6%, 94.3%
Auckland City, $1,238,979, 0.5%, 0.3%, 99.0%
Central, $1,070,104, -1.5%, -1.2%, 87.9%
East, $1,570,660, 1.3%, 1.6%, 97.1%
South, $1,104,286, 1.2%, -0.1%, 105.1%
Islands, $1,147,678, 0.5%, 3.8%, 79.5%
Manukau, $901,504, 0.2%, 0.3%, 97.0%
East, $1,152,975, 0.0%, -1.2%, 93.4%
Central, $698,565, 0.1%, 1.7%, 85.8%
North-west, $781,699, 0.4%, 1.9%, 111.6%
Papakura, $702,466, 0.2%, 4.0%, 95.3%
Franklin, $665,311, -0.8%, 1.0%, 68.2%
Northern border, down country & nationally:
Whangarei, $528,543, 3.2%, 6.9%, 33.4%
Kaipara, $539,471, 2.8%, 3.4%, 36.0%
Waikato, $473,429, -10%, 5.2%, 56.4%
Hamilton, $558,615, 0.8%, 3.3%, 54.5%
Tauranga, $702,850, -0.2%, 1.7%, 46.0%
Gisborne, $312,693, 0.8%, 6.9%, 5.2%
Wellington region, $651,725, 1.5%, 7.4%, 43.0%
Christchurch, $495,692, 0.5%, 0.1%, 30.7%
Queenstown Lakes, $1,168,728, 3.4%, 7.0%, 70.0%
Dunedin, $411,669, 1.8%, 10.1%, 43.8%
Invercargill, $266,950, 0.9%, 9.9%, 21.0%
Total NZ, $673,797, -0.7%, 5.1%, 62.6%
Attribution: QV tables & release.