After 12 months of house price falls nationwide, values are starting to grow again in some suburbs. Photo / Doug Sherring
House prices have risen in 12 per cent of Auckland’s suburbs over the past three months, sparking hopes among owners the bottom of the market is close.
The city’s potential recovery - after 18 months of tumbling prices - appears to be tracking slightly ahead of New Zealand as a whole where prices have risen in 10 per cent of all suburbs, property researcher CoreLogic said.
CoreLogic chief property economist Kelvin Davidson said Auckland may be among the first regions showing green shoots of price recovery because it is among the regions to have experienced the biggest falls since prices reached record highs in late 2021.
He said strong migration into New Zealand could also be boosting rental and house buying demand in main centres like Auckland and Christchurch.
Yet he isn’t expecting a fast bounce-back in the market.
“The trend shows house price falls have effectively levelled out and provides further, albeit tentative, evidence that the downturn may be winding up, for better or worse, depending on your perspective,” Davidson said.
“I’m still expecting further falls to come, and there will be no neat end to the downturn, rather the expectation is for a relatively subdued market, as stretched affordability and tight investor regulations contain demand and limit growth.”
The fact the downturn’s tide will likely be slow to turn was borne out in the numbers, Davidson said.
He said that, despite one in 10 Auckland suburbs rising in value, most suburbs still experienced price fall.
Overall, house prices fell in 165 Auckland suburbs in the three months to June, remained flat in another seven suburbs and rose in just 23, according to CoreLogic’s Mapping the Market research.
Of those 23 suburbs that rose in value, 14 had prices rise by at least 0.5 per cent, with South Auckland’s Red Hill being the strongest performer with prices rising 2.5 per cent.
When viewed over the past 12 months, all 195 suburbs in the Auckland region experienced price falls, Davidson said.
The falls ranged from less than 5 per cent in areas such as exclusive Ponsonby and Omaha and Waiuku in the south, up to more than 16 per cent in coastal Parau in the west and Wattle Downs and Totara Heights in the south.
Overall, 107 suburbs had a drop of at least 10 per cent.
Across New Zealand as a whole, 860 suburbs out of 917 declined in value in the past 12 months.
Of those, 729 suburbs fell by at least 5 per cent.
Wellington had the 18 suburbs with the biggest falls - all in the range of 19-24 per cent.
When taken over the past three months to June, however, the trend starts to tick up.
The CoreLogic data shows 128 suburbs increased in value in the past three months and, of those, 71 recorded an increase in median value by at least 0.5 per cent.
The Kaipara District, in the Northland Region, had two top-performing suburbs over the past quarter, with values in Maungaturoto and Kaiwaka up 4.7 per cent and 3.5 per cent.
Davidson said similar to in Auckland, there is an expectation the “floor” for price falls may be closer “as mortgage rates peak, migration spikes, employment stays high, and credit rules loosen.
“It wouldn’t be a surprise to see a few more suburbs show increases in the next three to six months, but we do not anticipate a fresh boom. Indeed, mortgage rates are still high, affordability is stretched, and debt-to-income-ratio restrictions loom large in early 2024,” he said.
Elsewhere, all 96 suburbs in Wellington have fallen in value over the past 12 months, while just one rose in value during the last three months.
All 34 suburbs in Hamilton analysed by CoreLogic, meanwhile, fell in value over the past 12 months. However, during the last three months, four rose in value.
In Tauranga, none of the 20 suburbs have risen in value in either the past year or the past three months.
Christchurch’s 82 suburbs have shown the most resilience, Davidson said.
One suburb, Wainui, has risen in value over the past year while a number of others fell by less than 1 per cent.
Over the past three months, 11 suburbs have risen in value.
In Dunedin, all 62 suburbs experienced a drop in median values in the year to June, while nine suburbs have rebounded in the last quarter to produce record price rises.