New Zealand property values have fallen just one percent since the start of the Covid-19 crisis, according to a new index designed by OneRoof and its data partner Valocity.
Of the 16 major regions in New Zealand, 12 have seen declines since March 25 - the day before the country went into month-long lockdown - with values in the remaining regions stalling.
Auckland values bounced back from their post lockdown drop, but are still quite soft, (currently down 1.6 percent from March 25).
Of the city's sub-markets, Auckland City and Rodney are in strongest position, with values in each dropping less than two percent. The North Shore is in the weakest position, dropping 3.8 percent on the new index.
Start your property search
- Scroll down to see the full index
OneRoof editor Owen Vaughan says the index shows clearly that overall the housing market is doing better than was forecast at the start of the crisis.
"While the full impact of Covid-19 won't be clear until mortgage deferrals and the wage subsidy scheme come to an end, it seems the housing market has rebounded from the lockdown," Vaughan says.
"The index shows that values in many locations are back to where they were at the start of the year, when the market was starting to run hot. The question for buyers and sellers is whether or not the bounce back will short-lived."
OneRoof and Valocity created the new index to solve the challenges of measuring a housing market that suffered an unprecedented shutdown and faces an uncertain future.
James Wilson, director of valuation at Valocity, said: "When we looked at the market using traditional methodology, comparing activity now to activity 12 months ago, we saw that only two territorial authorities - Kaipara and Selwyn - have seen declines in property values and that 38 have enjoyed more than 10 percent growth.
"This gives a false impression of what's going on in the market. Yes, property values are up but that's more a reflection of the fact that these locations were experiencing value growth in the three to six months before lockdown."
Wilson says the drop in sales volumes forced OneRoof and Valocity to look at a range of different market metrics, not just median sale prices.
"By breaking down what’s been selling together with the nature of the housing stock in any given location allows us to track more effectively the actual changes in individual submarkets."
The OneRoof-Valocity index sets as a baseline property values on March 25, 2020, the day before the country went into alert level four lockdown. Every sale since that date has then been analysed, a value applied which is then tracked in accordance with the baseline value, allowing subtle changes in the market to be measured.
"Using such a benchmark index allows us to use the limited sales which have transacted since lockdown by individually applying them to the index, removing the impact that low volumes and sales composition can have on metrics such as median sale price."
The index shows the impact of the lockdown and the extent of the bounce-back in each TA and region.
The best performing TA was Rotorua (up 4.6 percent) but low sales volumes make it hard to measure the market with accuracy. The best-performing TA with a healthy sales volumes was Lower Hutt, which was up 1.1 percent.
The biggest faller on the index was Queenstown Lakes (-7.7 percent), but it too has suffered low sales volumes. The weakest TAs with high sales volumes were Auckland North (-3.8 percent) and Christchurch (-3 percent).
The worst performing regions were West Coast (-5.7 percent), Otago (-2.47 percent) and Northland (-2.11 percent), while the best-performing regions on the index were the Bay of Plenty (up 1.5 percent), Southland (up 0.7 percent) and Waikato (up 0.4 percent).
Wilson says: "With the index, we can start to judge whether the better than expected market activity post lockdown is a dead cat bounce or an indication that the underlying drivers of the market pre-lockdown are still in play."
Wilson notes that the index clearly shows the erosion in property values isn't a crash. "For example, North Shore values are where they were at the start of February, when the market there was picking up speed. Auckland City is back to where it was at the end of January," he says.
"The index also shows that the North Shore had the steepest hill to climb following last year's slump."
Here are the latest property values, together with annual change in growth, which only tells part of the story.
