Use our interactive to find out the latest median value for your suburb.
Start your property search
At the start of 2019, the big unknown for the property market was capital gains tax. Uncertainty around what the Tax Working Group was exactly recommending, and whether or not the Government would act on those recommendations, contributed to certain amount of hesitancy in Auckland. Now that capital gains tax is off the table - and likely off the table for a generation - will the market pick up speed in the country’s biggest housing market?
Outside of Auckland, where the catch-up effect has been rocket fuel to property values, a different question is now starting to be asked: how long have we got before the slowdown hits us too?
Historically low interest rates and a retreat from the market by investors and movers, driven in part by government legislation, have helped first-home buyers claim a bigger share of the market over the last 12 months.
The flattening in Auckland has made it easier for some buyers in the city - there’s less pressure to buy than at the height of the market – but the biggest hurdle to getting into a home remains the banks’ LVR requirements, even outside of Auckland.
Nationally, property values continue to rise, with the median value for the country increasing by less than five per cent to $577,000 in the last 12 months. This growth has been mostly fuelled by strong house price inflation in many smaller regional centres, where affordability isn’t the biggest challenge facing buyers.
Sales volumes within many of New Zealand’s main urban centres, however, are in decline and new trends can be seen in sales figures.
Nationally, the majority of sales (32.5 per cent) are above $800,000, fuelled mostly by transactions in the main cities, but the figures also show a surge in the number of properties selling for under $300,000 (10.6 per cent of all New Zealand sales).
This bracket represents just 9.4 per cent of sales (by value of housing stock) and indicates that buyers are chasing more affordable housing stock, resulting in properties at these levels accounting for an increasingly larger share of total sales. This has the potential to distort the headline figure for an area, making it appear that all values are declining, when in reality it’s more a reflection of what’s selling.
The catch-up effect
What’s increasingly evident in the figures is the “catch-up effect” at play within New Zealand’s smaller towns.
The surge in Auckland during the boom years quickly spread to Hamilton and Tauranga, then Wellington and Dunedin, and is now putting juice into the next rings out, such as Whangarei, Whakatane, Gisborne, Palmerston North, Whanganui, Carterton, Upper Hutt and Invercargill.
However, whilst property values in these periphery markets are still enjoying significant growth levels, the rate of growth is showing signs of easing, with most of them now reaching median value levels of above $400,000.
It’s clear buyers are beginning to shift to the next most affordable locations. The six regions and towns that have experienced the highest annual rates of growth are Wairoa (29.1 per cent); Opotiki (25 per cent); Tararua (25 per cent); Kawerau (21.9 per cent); Hawke’s Bay (21.4 per cent); and Whanganui (20.4 per cent); and they all have median values of less than $400,000.
Auckland in decline?
After enjoying a long-run significant capital growth - nearly 50 per cent - value levels in Auckland have spent the last almost two years not budging at all or dropping.
Nine out of 10 of the biggest suburb fallers are in Auckland, including the country’s wealthiest neighbourhood, Herne Bay, which fell 12 per cent to a new median value of $2.19 million.
Looking into the last 12 months, only Papakura and Rodney experienced value growth of more than two per cent. The North Shore and Auckland Central fell by 5.5 per cent and 1.5 respectively during the same period.
Sales volumes across the city continue to fall, but when we look into the composition of what is selling, we can an over-representation of stock selling at lower price brackets than a year ago.
The percentage of total sales above the $1 million price bracket is consistently below the percentage of housing stock valued at $1 million-plus, whereas sales between $600,000 and $1 million are over-represented when compared to the value of stock.
This gap is being driven by first-home buyers, who now represent the largest share of new mortgage registrations in Auckland (more than 27 per cent), and are naturally attracted to the lower price brackets.
The impact of this on headline value movements for a suburb can sometimes be misleading as it may appear a suburb is declining or collapsing in value, when in fact there has simply been a bigger share of lower priced housing selling.
However, this doesn’t get those suburbs off the hook entirely.
Houses in higher price brackets in the city’s high-value suburbs are not selling as quickly or for as much as they used to. This is down to a combination of factors, but the two most powerful are that vendors are still hanging their hat on the CV number; and buyers can now afford to pass on $1 million-plus homes that have clear drawbacks, such as build issues.
Auckland’s market is likely to remain subdued throughout winter months, although periphery locations on the southern, northern and western fringes may continue to experience growth as buyers seek out more affordable housing options.
Expect first-home buyers to continue to be the most active buyer group, but renewed investor activity off the back of the removal of capital gains tax is likely.
Market of sprinters and joggers
Hamilton
After values shooting up nearly 60 per cent in five years, Hamilton growth has stalled, median values grew 3.9 per cent in the last 12 months to $550,000.
Auckland buyers and investors on the hunt for more affordable housing drove the rise: more than 50 per cent of housing stock is less than $600,000. First-home buyers remain the most active players in the market, at over 30 per cent of new mortgage registrations, but investor’ share has dropped just 16.8 per cent (from a high of more than a quarter).
Tauranga
Tauranga’s dynamics have changed quite radically in relatively short period of time, diversifying from retirees and lifestylers to first-home buyers, families and investors.
The five-year leap in values of more than 65 per cent has slowed to just 5.6 per cent in the last 12 months to $665,000.
Investors have moved onto the next ring of towns (their share of buying activity has dropped from nearly a quarter of all new mortgage registrations to just 18.2). First-home buyers have filled the gap but with the most sales transactions between $600,000 and $750,000 they’re up against affordability.
Wellington
The late-to-the party capital city is one of the country’s top performers. The market there has surged over the past 12 to 18 months, with the median value growing 8.5 per cent to $766,000.
Wellington’s strong employment market and high volume of affordable housing attracts first-home buyers, as well as investors (with rentals helped by the area’s mobile workforce). Investors account for 34.6 per cent of new mortgage registrations.
Christchurch
The Christchurch market remains flat now that rebuild has balanced supply and demand.
The median value of $445,000 is the same as last year, and the market will stay flat well into 2020.
Christchurch has plenty of affordable new housing options (most sales are between $400,000 and $500,000) and first-home buyers account for nearly 33 per cent of new mortgage registrations. The share of new mortgage registrations to investors with three or more properties is one of the highest in the country, at 21.8 per cent.
Dunedin
Dunedin is the only main urban centre to register double digit value growth, rising 10.7 per cent.
With a median house value of $415,000, the area continues to appeal to first-home buyers (over 33 per cent of new mortgage registrations). Most sales transact between $400,000 and $500,000 and more than 65 per cent of housing stock is valued at less than $500,000. The city is expected to still be a magnet.
