New Zealand’s current market slowdown has hit the wealthiest suburbs the hardest, with values falling by up to $300,000 in some suburbs.
According to CoreLogic’s Mapping the Market tool, 10 New Zealand suburbs recorded a fall in value of $300,000, including blue-chip locations Saint Marys Bay, Westmere and Orakei in Auckland and Seatoun and Karaka Bays in Wellington.
CoreLogic NZ Chief Property Economist Kelvin Davidson said while the high-end suburbs have dropped the most in terms of dollar value declines, the falls have been broad-based.
“It’s not just the upper end of the market that has seen a downturn,” Mr Davidson said.
“More than a third of suburbs across New Zealand saw double-digit declines over the last year, and Wellington made up the bulk of the suburbs that posted the biggest falls.”
Mr Davidson said values fell by 20 per cent or more in 31 suburbs, with 30 of them in the wider Wellington region.
“Overall, this confirms that this downturn has been pretty deep and broad-based across many parts of the country – to the detriment of existing property owners, but a sign of hope for aspiring buyers who have their finances approved,” he said.
Homeowners in some smaller, South Island centres had a bit more reason to be optimistic according to Mr Davidson, with four suburbs posting double-digit increases.
The biggest risers were Tuatapere in Southland (11.2 per cent), Reefton on the West Coast (10.6 per cent), Waimate in South Canterbury (10.6 per cent) and Riverton in Southland (10.3 per cent).
Meanwhile, values in a further 30 suburbs grew by five per cent or more and Mr Davidson said those suburbs generally had affordability on their side.
“Incomes tend to be lower in regional areas than the main centres,” he said.
“But so too are house prices, and lower entry points in these markets may be supporting greater resilience in values.”
The main centres
Property values dropped in all 197 suburbs in Auckland over the past 12 months, with Waiuku posting the smallest decline of 0.3 per cent or $2800, while falls of 16 per cent or more were seen in Waiatarua, Otara, Wattle Downs and Clover Park.
While 185 suburbs in Auckland recorded a drop of five per cent or more.
In Hamilton, Temple View posted the biggest value drop of 10.1 per cent, while in Hamilton Central values were relatively flat, down 0.1 per cent or $950.
Mr Davidson said 28 of the 35 suburbs analysed saw values decline five per cent or more.
Values also dropped in all of Tauranga’s suburbs in the past year, with the biggest falls of around 10 per cent recorded in Parkvale, Gate Pa, Otumoetai, Papamoa Beach and Tauranga South.
More expensive suburbs like Mount Maunganui and Matua had the largest drops in dollar value of $100,000 or more.
Every suburb analysed in Wellington has been hit by the property market downturn in the past year, with values down nearly 28 per cent in Plimmerton and 25 per cent in Southgate.
Seatoun remains the most expensive suburb ($1.75 million) despite recording the largest drop in prices of $389,800.
Meanwhile, Christchurch held up better than other main centres, with nine suburbs either flat or still rising in value over the past year.
Aranui in Christchurch’s eastern suburbs rose 8.4 per cent, while at the other end of the spectrum, values fell nine per cent in Ilam, Spreydon and Sockburn.
Values also fell across Dunedin in the past year, with some suburbs hit harder than others.
Those falls ranged from three per cent in Karitane to 16 per cent in Saint Leonards, Maryhill, Ravensbourne, and Forbury while 37 out of 62 suburbs analysed saw values drop 10 per cent or more.
Property market forecast
Mr Davidson said the property market still had significant challenges, including high mortgage rates for new borrowers and expensive repricing for existing borrowers.
“But many areas have already fallen significantly, and therefore could be poised to bottom out first as underlying drivers settle down,” he said.
“Overall, even if sales activity and property values bottom out this year as is expected, the property market may well remain subdued into 2024.
“But those ‘early fallers’, or suburbs where values dropped first, could then rise sooner too.”