Auckland’s housing market has dropped by almost $20b in the past year

The total value of Auckland house sales has dropped by billions of dollars this year. Photo / Alex Burton

Auckland house sales have fallen by almost $20 billion over the past year as prices have taken their fastest dive since the Global Financial Crisis a decade ago.

New data shows $26.4b worth of house sales were completed in the 12 months through to the start of November.

That’s 43 per cent less than the $46.3b worth of sales made over the same 12-month period a year earlier when the market was booming, data from analysts Valocity showed.

Amid the declining market, however, new southeastern mega-suburb Flat Bush has been among the city’s best-performing areas.

It has had 371 homes sell for a total value of $445 million over the last six months - making it the suburb with the second-biggest total value of sales, behind only Remuera.

Harcourts Flat Bush co-owner Brandon Hoverd said the suburb is popular with families wanting bigger houses.

And these types of buyers have continued buying through the downturn in greater numbers than other groups, such as investors, as they look to capitalise on falling prices.

“The area has continued to sell fairly well in a declining market because of the opportunity,” Hoverd said.

“We’re selling properties for $1.7m that we would have gotten $2m for last year.”

Flat Bush’s relatively steady sales during the market downturn are part of a growing shift in Auckland’s centre of gravity to the south.

Flat Bush is popular with families wanting bigger houses, Harcourts Flat Bush co-owner Brandon Hoverd says. Photo / Nick Reed

Four out of five of the city’s biggest selling suburbs over the past six months – Remuera ($493m), Flat Bush ($445m), Papatoetoe ($281m), Papakura ($277m) and Pukekohe ($272m) – are in the south.

Yet just five years ago in 2017, Flat Bush was the only southern suburb in that year’s top five biggest-selling suburbs – Remuera ($1.079b), Auckland Central ($914m), Flat Bush ($647m), Hobsonville ($454m) and Epsom ($442m).

Similarly, Flat Bush has been closing the gap on inner Auckland suburb Remuera as the city’s most valuable suburb.

In 2017, Flat Bush’s $647m worth of sales over the 12-month period was just 60 per cent of the $1.079b worth of sales made in Remuera that year.

However, Flat Bush’s $445m over the last six months is now just 10 per cent less than the $493m worth of sales made in Remuera.

Yet the new figures come against a backdrop of plummeting sales.

Senior economist Kelvin Davidson with analysts CoreLogic said the New Zealand housing market’s downturn has deepened over the past three months.

He said the number of sales being completed was at its lowest level in a decade, while the speed at which average property prices were falling was rivalling or “even getting a bit worse” than those experienced during the GFC.

In Auckland, the average house price had now fallen to $1.4m - or 5.5 per cent lower than they were at the same time last year, according to the OneRoof-Valocity House Value Index.

James Wilson, head of valuations at Valocity, recently said that, while more houses had come up for sale with the start of spring, there was already an oversupply.

That meant the average number of days it took homes to sell was continuing to rise, he said.

“As interest rates and the cost of living continue to rise and lenders apply higher test rates as part of the mortgage application process, borrowers’ purchasing power continues to reduce,” he said.

In Flat Bush, meanwhile, Harcourts’ Hoverd said the suburb with its large 7-8 bedroom homes with up to 320sq m of floor space especially appealed to intergenerational families.

These houses often had more than one living space and were sometimes bought by extended relatives wishing to move in together.

“You’ve got mums and dads, and then they’ve got everyone from kids to grown teens and early-20s, plus the grandparents, in the same house at the same time,” he said.

Hoverd said some Flat Bush house prices had fallen by 20-25 per cent since the market peaked in November.

That meant developers were more willing to negotiate and cut a deal on finished newbuild homes as they were having trouble and “feeling the pinch” in trying to clear their stock, he said.

“There’s been a massive influx of stock that has come onto the market in the last six to nine months,” Hoverd said.

“And there are properties that have been on the market now for in excess of three to five months.”