While most suburbs in New Zealand have been experiencing steep home price declines in the past three months, there are still areas that have seen growth according to CoreLogic.
CoreLogic NZ’s interactive Mapping the Market tool found that 66 suburbs, or approximately 7 per cent of all suburbs, recorded a growth rate of 1 per cent or more in the past three months.
The suburb of Kawakawa in the country’s Far North District had the highest percentage growth rate – up 6.5 per cent – to a median of $469,550.
While, the lifestyle suburbs of Arrowtown and Lower Shotover, both in the South Island’s Queenstown-Lakes District, had the highest dollar increase for the quarter, increasing 4.9 per cent and 4.8 per cent, equivalent to $102,750 and $74,500.
CoreLogic New Zealand’s Chief Property Economist Kelvin Davidson said there are only a very low proportion of homes seeing growth in the current market due the impact of rising interest rates.
“These figures are the culmination of the lagged impact of rate rises, record inflation and other economic influences having an impact on the market,” Mr Davidson said.
“We knew it was coming and it’s been interesting to see it play out, with downward momentum widespread, but almost universal in our city centres with few areas able to escape the weakness.”
Over the past three months, 90 per cent of Auckland suburbs (180 of 201) have seen their median property value drop – 73 of those suburbs have seen a fall of at least 2 per cent and only eight saw a rise of 1 per cent or more.
Across the country, 56 suburbs recorded a fall in median value of 5 per cent or more, with the two largest declines hitting Korokoro in Lower Hutt City and Mangakino in the Taupo District, which fell 10.2 per cent and 10.7 per cent respectively.
According to CoreLogic, across Auckland, Herne Bay remains the most expensive suburb (median value of $3,666,350), and has bucked the trend that’s occurred in 90 per cent of the city, with a slight pickup in value of 0.5 per cent since September.
In contrast, areas such as Sunnyhills and Omaha have seen their median value drop by $70,000 or more over the past three months.
For Hamilton, all 34 suburbs have seen a fall in their median property value, ranging from -3.4 per cent in Melville to -0.5 per cent in Baverstock, with 13 of the 34 suburbs seeing falls of at least 2 per cent.
Some parts of Tauranga have avoided median value falls in the past three months (Matua, Judea, and Bellevue), but the rest declined – ranging from falls of 0.1 per cent in Ohauiti to -2.7 per cent in Tauranga South.
CoreLogic said there have been near universal falls in median property values across the wider Wellington area lately, with only Aotea, Waitangirua, and Cannons Creek (all in Porirua) having avoided declines since September.
The remaining 91 suburbs all fell, and by at least 1.5 per cent, with the weakest being Korokoro, which declined by 10.2 per cent.
Roughly a quarter of Christchurch’s suburbs (21 out of 85 analysed) avoided recording a fall in values last quarter.
The 3.2 per cent falls in Hillmorton and Russley may have been the worst in the city, but were relatively mild compared to other parts of New Zealand.
While, 16 of 62 suburbs in Dunedin have avoided median value falls since September, with the worst declines (e.g. 3.1 per cent in Waikouaiti) being mild compared to other parts of New Zealand.
Mr Davidson said New Zealand’s economy and property market have clear challenges ahead in 2023, and the country’s labour market and mortgage rates may be the key drivers again, as they have been this year.
“The general outlook for the housing market remains weak, especially in light of the Reserve Bank’s predictions that the economy will enter a recession,” he said.
According to Mr Davidson, inflation is not expected to begin easing until the second half of next year and the official cash rate and unemployment levels will both increase.
“It’s a tricky combination for the property market and home owners alike,” he said.
“However, if large-scale job losses can be avoided, further falls in property values may be contained and possibly plateau in the second half of 2023.
“But pessimism would take over if employment did start to fall more sharply.”