New house price figures from OneRoof.co.nz show property values in more than a dozen Kiwi suburbs have exceeded or returned to their pre-downturn peaks.
The latest report from OneRoof and its data partner Valocity highlights building momentum in the housing market.
OneRoof and Valocity analysed value movements in the 927 New Zealand suburbs with 20-plus settled sales in the last 12 months.
A total 566 suburbs recorded value growth in the three months to the end of October, almost 100 more than the tally at the end of September.
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But the analysis also identified 18 suburbs where the the effects of the most rapid house price decline in recent history had been reversed.
The wealthy beach town of Omaha, on Auckland's fringes, leads the pack, with its average property value of $2.863 million now $21,000 above its pre-slump peak of $2.842m, recorded at the end of 2021.
Christchurch also features heavily on the list, reflecting the strength of the city's housing market during the downturn.
The figures show property values in seven of the city's suburbs have exceeded or are on par with pre-slump peaks.
The analysis highlights a further 14 suburbs nationwide where property values are just a few thousand dollars shy of returning to peak.
OneRoof editor Owen Vaughan said the data was encouraging and further evidence of market confidence.
"The suburbs identified by the research vary in location and price point, but what they all have in common is their resilience during the slump," Vaughan said.
"Very few suffered substantial price drops, and so were able to regain lost ground quickly when the market turned.
"However, just a five percent lift in the market would see hundreds more suburbs return to peak prices."
The OneRoof-Valocity figures showed the tide had firmly turned in the market's favour at both a nationwide and regional level.
The number of regions enjoying quarterly lifts in their average property value doubled within the space of a month.
Auckland and Canterbury values were up by more than 2% in the three months to the end of October while New Zealand’s average property value grew 1.7% over the same period to $952,000.
Of the growth holdouts, only Nelson and West Coast appear to be sliding backwards, with the rate of value decline in Northland and Taranaki easing.
The OneRoof-Valocity figures also showed that for the first time since March 2022, all seven of the country’s major metros recorded quarterly lifts in their average property value, with Dunedin and Queenstown-Lakes joining the growth club in October.
Vaughan said: “Market confidence has been strongest in the bigger centres, but is starting to spread to smaller regional metros. Whangarei, Napier and Invercargill all turned the corner in October. The biggest success story continues to be Christchurch. Its average property value was up 2.5% over the quarter to $768,000, driven by strong first home buyer activity.
“Stock levels remain tight, though. New listings for Canterbury in October were down 3.4% year-on-year, with total listings up only 7.5% on what was poor October last year. Encouragingly, Auckland new listings for October ticked up almost 2% year-on-year but overall stock is down 8.3% in the region.”
Vaughan said the election had impacted listings, with agents telling OneRoof in the lead-up to the October 14 poll that hesitant vendors were waiting for a result before bringing their home to market.
“There does appear to have been a small post-election bump in the number of homes for sale on OneRoof but it’s early days yet, and two weeks’ worth of new listings is not enough to draw any firm conclusions about the direction of the market,” he said.
At a suburb level the biggest quarterly lifts continue to be found in Christchurch, with Merivale and Fendalton topping the table with quarterly growth of 8.1% and 7.9% respectively.
Of the 204 Auckland suburbs with 20-plus settled sales in the last 12 months, 180 recorded quarterly growth – up from 150 the month before. Growth was strongest in Wesley (+7.7%), New Windsor (+6%) and Pinehill (+6%), but price momentum was clear in a further 105 Auckland suburbs, where quarterly growth exceeded the city-wide growth number of 2.3%.
Most of the growth suburbs (363) had an average property value of below $1m, reflecting the continued dominance of first-home buyers in the market. However, the revival has also given a boost to some of the country’s most expensive suburbs, including St Marys Bay (+4.2%), Remuera (+4.2%) and Herne Bay (+3.2%).
OneRoof editor Owen Vaughan: "There does appear to have been a small post-election bump in the number of homes for sale on OneRoof but it’s early days yet." Photo / Fiona Goodall
Helen O’Sullivan, global CEO of real estate for Valocity, said while the incoming National Government had pledged to reintroduce interest deductibility for investors and reduce the bright-line test from 10 to two years, it was too early to assess the impact of the election result on the investor market.
"High net migration is driving rental demand and rental prices, but interest rates are still at challenging levels. Until interest rates ease, the prospect of interest deductibility will only serve as pain relief, rather than a reason to make new purchases," she said.
Wayne Shum, senior research analyst for Valocity, said the continued absence of investors showed in the mortgage registration data, with first-home buyers continuing to dominate, with a 45.1% share in September, down from a two-year high of 45.5% in August.
“The recent decline in annual inflation to 5.6% may indicate the end of OCR rises in this cycle. However, the wholesale cost of funding is still high, leading to further mortgage rate increases. Global uncertainties and conflict in the Middle East are also likely to add to economic pressures.”
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Note: Property value data derived from the OneRoof-Valocity House Value Index, taken on October 20, 2023. Only suburbs with 20-plus settled sales in the last 12 months covered. Rolling changes encompass a 13-week period that includes the seven days after the date highlighted. Listings data from OneRoof.co.nz, taken on October 20, 2023. New listings figures cover the 30 days to October 20, 2023.
