Quotable Value Ltd has one view of the housing market from its monthly figures – a continuing gradual decline – while I have a much different perception, particularly around Auckland.
If you go back through the market/residential/QV file on this website, you’ll find positive shifts (ie, far more up than down) all the way back to last September, including through the pandemic worries. You can check a few of the monthly shifts in the story links below.
Ideally, the Labour part of this coalition government would like to see house prices fall, making them more widely affordable. In a separate piece today, you’ll see that the addition to the housing stock has risen over the last 3 years.
But that alone isn’t what moves the price gauge. That gauge is set, first, by pressure to buy in the most expensive suburbs – in Auckland, Remuera, through the eastern suburbs and across in Ponsonby. Chinese buyers who aren’t NZ citizens have been forced out of the market, which for many has primarily been about finding a bolthole, but buyer pressure remains extremely strong.
10-12 months ago, QV’s figures for Auckland were all negative for 3 & 12 months, reflecting the leading role played by Auckland’s most expensive suburbs; as Auckland went into a brief decline, the rest of the country became more buoyant as it played catchup.
For Auckland in the figures to June this year, you will find one negative – a slight shift for the Hauraki Gulf islands for the latest 3-month period. Over 12 months, the shift throughout the region has been strongly positive – above 5% in many areas, above 6% in 2 of the most expensive neighbourhoods, and more firmly upward in the outliers – the Hibiscus Coast & northern Rodney have been weak, but this time show gains of 4.6% & 3.7% over a year, while Franklin is up 3.5% over a year.
By comparison with that strong price picture for the region, through QV’s index calculations, QV itself raises doubts.
I posted related company CoreLogic’s view on the monthly figures yesterday instead of these QV figures (lost email, my fault), but here’s how QV led into its news release:
“New Zealand’s quicker than expected transition down the lockdown levels has provided a timely reprieve for the residential property market. The real estate sector is reporting strong interest from vendors with listings back close to normal winter levels, while banks are reporting strong enquiry levels from potential buyers. But is the resurgence sustainable?
“QV general manager David Nagel said: ‘The QV house price data continues to reflect a gradual decline in quarterly growth in June, with 13 of the 16 major cities we monitor showing a reduction in the rate of growth since May. This indicates the heat we saw in the market pre-lockdown gradually dissipating as the market begins to settle.’
The average value nationally increased 1.3% over the past 3-month period, down from 2.4% in May, with the average value now sitting at $738,018. This represents an increase of 7.4% year on year, slightly down on annual growth of 7.7% last month. The average value in the Auckland region sits at $1,082,541, up 1.5% over the last quarter, and remains 5.4% up year on year.
‘A combination of pent-up demand following lockdown, plus vast numbers of returning expats over the past few months, has contributed to strong attendance at open homes, auctions & tenders in most locations throughout New Zealand. Record low interest rates have also helped to ensure prices have held up well so far, with an active buyer pool dominated by investors & first home buyers,’ says Mr Nagel.
‘The resilience of the New Zealand economy as well as the property market has surprised many commentators, no doubt assisted by the country’s rapid return to a new normal. But with government wage subsidies ending in September and many homeowners that sought relief from banks with mortgage holidays likely to feel some financial pressure heading into summer, the worst is still ahead of us,’ he says.
‘We’re seeing some early signs of value stress, with the QV house price index in Queenstown declining by 1.5% for the 3-month period to June. This is the first fall in quarterly values for a major urban area that we’ve seen this year. This is not unexpected given the heavy reliance on tourism & short-stay rental accommodation in this location,’ he says.
‘Market resilience over the coming months will be reliant on a continuation of returning Kiwis feeding demand as both buyers & tenants. Grounded Kiwis unable to embark on their OE will also help to fill the void of migrants coming into the country. It goes without saying that a return to lockdown protocols would be catastrophic to market confidence,’ says Mr Nagel.
“Our earlier projections that the market will experience a correction of 5-10% by Christmas time from the pre-Covid high of January to March 2020 is still looking likely. While some parts of the country will be harder hit than others, any fall in value should be put into context. Most parts of New Zealand have experienced value growth in excess of 5-10% in just the past 12 months, so for those that can weather the storm, this is simply a passing aberration,’ he says.”
Below, the dollar figure is the average value for June. The first percentage is for the 3 months to June, 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 (now a decade out of date; councils marked in bold); Kaipara & the Hauraki Gulf Islands, as usual, have low counts, and this time they’re joined by a low count in the eastern suburbs of the isthmus:
Auckland region: $1,082,541, 1.5%, 5.4%, 98.7%
Total NZ: $738,018, 1.3%, 7.4%, 78.4%
The Auckland region:
Rodney: $982,802, 0.8%, 4.1%, 67.6%
North: $1,006,216, 1.0%, 3.7%, 67.5%
Hibiscus Coast: $959,114, 0.5%, 4.6%, 63.3%
North Shore: $1,247,243, 1.2%, 5.9%, 93.3%
Coastal: $1,415,153, 0.7%, 5.3%, 87.8%
Onewa: $1,018,912, 2.6%, 7.8%, 105.4%
North Harbour: $1,208,258, 0.2%, 5.1%, 98.8%
Waitakere: $857,496, 2.0%, 5.3%, 102.2%
Auckland City: $1,277,755, 1.6%, 5.8%, 105.3%
Central: $1,111,692, 1.3%, 6.3%, 95.2%
East: $1,614,325, 2.6%, 5.4%, 102.6%
South: $1,139,483, 1.0%, 6.2%, 111.7%
Islands: $1,156,945, -0.1%, 3.6%, 81.0%
Manukau: $939,908, 1.9%, 5.7%, 105.3%
East: $1,202,416, 1.7%, 5.9%, 101.7%
Central: $722,999, 1.4%, 5.2%, 92.3%
North-west: $821,734, 2.1%, 5.8%, 122.4%
Papakura: $728,414, 1.8%, 2.7%, 102.5%
Franklin: $696,001, 1.3%, 3.5%, 76.0%
On the borders & down country:
Kaipara: $570,218, -1.6%, 3.0%, 43.7%
Hamilton: $627,777, 0.7%, 7.3%, 73.7%
Tauranga: $794,189, 2.8%, 6.7%, 64.9%
Wellington region: $783,655, 0.4%, 10.4%, 72.0%
Christchurch: $518,369, 0.8%, 3.7%, 36.6%
Queenstown-Lakes: $1,192,613, -1.5%, 1.6%, 73.4%
Dunedin: $547,531, 1.8%, 18.9%, 91.3%
8 July 2020: QV sees Covid-19 impact on housing market, but movements are split
3 June 2020: House values bounce, especially on the Shore
1 April 2020: QV’s David Nagel recounts the strong housing performance, then the recoil, then the paths people may follow
6 November 2019: More gains in latest QV housing market figures
4 September 2019: What’s moving Auckland’s housing markets? Growth continues around regions
7 August 2019: Auckland housing value changes stay marginally negative
3 July 2019: QV housing figures ho-hum – except for Dunedin
Attribution: QV release.