Click here to download this report >
Auckland house prices have suffered their biggest drop this side of the GFC.
The latest figures from the OneRoof-Valocity House Value Index show the city's average property value fell 2% in the three months to the end of April to $1.545 million.
Start your property search
The $32,000 drop was Auckland's second consecutive quarter-on-quarter decline and pushed property values in the city back to November levels.
The last time Auckland property values fell by as much as 2% was in 2008, when the country's property market was reeling from the effects of the global financial crisis.
The pain was felt across the city, with house prices falling or showing zero growth in 138 Auckland suburbs, up from 58 in the three months to the end of March.
Mt Roskill, in Auckland's central fringe, suffered the country's biggest value drop; its average property value fell 8.2% ($117,000) to $1.314m over the quarter.
No other region saw value declines over the quarter, but the figures show the brakes are firmly on, with the nationwide average property value up just 0.5% over the quarter to $1.094m, and growth in the regions sitting at around 1-2% - a far cry from the 5-10% growth spurts some were enjoying in the closing months of last year.
James Wilson, head of valuations at OneRoof's data partner, Valocity, said that Auckland was bearing the brunt of the sudden slowdown.
"Over the last decade Auckland property values have fallen, but only marginally. You have to go back to the GFC to find drops of 2% or more in the city's housing market," he said.
"But while the change will no doubt be a concern to those who bought at market peak, the outlook for Auckland, and the rest of the country, isn't as dire as it looked during the GFC.
"Yes, interest rates are on the rise but back in 2008 the Official Cash Rate was just over 8%, as opposed to 1.5% now. The worst of Omicron wave seems to have passed and many of the Covid restrictions are being lifted. The Government's review of the CCCFA lending rules may also remove the additional barriers that suddenly impacted some groups such as first home buyers.”
Northland was the country's strongest performer, recording a 5.8% ($51,000) rise in its average property value, but the figures also point to fatigue within the region's housing market, with quarterly growth sliding from 7.4% in the three months to the end of March.
Valocity head of valuations James Wilson: "You have to go back to the GFC to find drops of 2% or more in [Auckland's] housing market." Photo / Fiona Goodall
The change in market conditions was also evident in Taranaki, the next strongest performer - with its quarterly growth figure dropping from 6% in March to 3.4% in April.
Next to Auckland, the weakest market was Greater Wellington, where quarterly growth slid from 2.9% to 0.5%.
Of the country's 72 territorial authorities, 17 registered zero or negative growth over the quarter, with Lower Hutt suffering the steepest drop, at 2.9%.
Hamilton's average property value dipped 0.5% ($5000) to $921,000, and while value growth stalled in Tauranga (0.6%) and Dunedin (0%).
The other major metros managed to keep their heads above water, with Queenstown-Lakes recording solid growth of 3.6% over the quarter.
OneRoof editor Owen Vaughan said the slowdown would be a jolt for many. "At the end of 2021 the quarterly growth figure for New Zealand was running at almost 7%. In Auckland, it was 7.6%. That's quite a shift and one that will have wrong-footed a lot of sellers, especially now there's more stock on the market and less urgency among buyers.
"However, property values in every region are ahead of where they were six months ago. Those who bought before 2020 and are considering selling will still feel the effects of the boom."
Nationwide, first-home buyers' share of purchases dropped from 38.9% in the last quarter of 2021 to 36.2% in the first quarter of this year, while investors' share of the market remained steady at 24.3%. New mortgage registrations by movers increased from 17.2% to 18.3% but the group's share of the market has been hovering around the 17-18% level for much of the last two years.
However, the actual number of registrations points to a collapse in the market in the first quarter of 2022, the likely result of hikes in mortgage rates and the stringent criteria home loan applicants face as a result of the changes to the CCCFA.
The number of registrations by first-home buyers fell by 28% from just over 10,000 in the last quarter, their lowest quarterly showing since the second quarter of 2020 when Covid put the country into lockdown. Investors’ registrations fell 27% over the same period.
Wayne Shum, head of research at Valocity, said: "The steady rise in mortgage rates has dampened market activity, and put downwards pressure [on] the volume of mortgage registrations, but the CCCFA has probably had the biggest effect on buyer appetite. For many, getting a mortgage has proved too hard, and delayed or torpedoed purchase plans. The U-turn on some of the CCCFA's more stringent measures will come into effect in June, so there may be a brake on further falls."
HOUSING MARKET AT A GLANCE
New Zealand's average property value grew 15.7%, or $153,000, in the last 12 months to $1.094m. Quarterly growth was 0.5%, or $5000. Northland was the hottest region over the quarter, recording value growth of 5.8% ($51,000) to $923,000. Wairoa, in Hawke's Bay, was the country's best-performing territorial local authority, with its average property value up 13.3% to $495,000.
Most expensive: Herne Bay, in Auckland, is New Zealand's most expensive residential suburb, but value growth in the waterfront enclave has come to a stop. Over the last three months, Herne Bay's average property value grew just 0.6% ($24,000) to $4.192m. Its nearest metro competition is Saint Marys Bay, where QoQ value growth has also stalled - up 0.4% to $3.288m.
Sixty-five suburbs with 20 or more settled sales in the last 12 months recorded an average property value of $2m-plus, down from 71 in the 12 months to the end of March. The drop is more a reflection of the low sales rather than a wholesale drop in property values. However, two Auckland suburbs with more than 20 settled sales dropped out of the $2m club as a result of declining values over the last three months: Northcote Point's average property value fell 3.5% ($73,000) from $2.06m to $1.987m; and Bucklands Beach's average property value fell 2.6% ($53,000) from $2.012m to $1.945m.
The value slide also knocked Herne Bay's next-door neighbour out of the $3m club. Westmere's average property value fell 1.9% ($58,000) over the last three months from $3.23m to $2.965m.
The average property value in Langs Beach, Northland, jumped $268,000 in the last three months. Photo / Getty Images
Cheapest: With an average property value of $233,000, Runanga, in Grey, is the best place to bag a bargain, but value growth in the town is slowing, from 7.2% in the three months to the end of March to 3.1% in the three months to the end of April. Of the 990 suburbs that recorded 20 sales in the last 12 months, 75 have an average property value of less than $500,000 and 526 have an average property value of less than $1m.
In demand: Manunui, in Ruapehu, recorded the country's biggest three-month value growth. Its average property value jumped 16.8% ($58,000) to $403,000. Just 15 suburbs saw their average property value grow by more than 10% in the last three months, down from 31 in the three months to the end of March and 91 in the three months to the end of February.
Biggest winner: Langs Beach, in Whangarei, gained the most, dollar-wise, in the last three months. Its average property value jumped $268,000 (12.4%) to $2.429m. Twenty-nine suburbs saw their average property value grow by more than $100,000 in the last three months, down from 94 in the three months to the end of March.
Biggest loser: The suburb that has suffered the most over the last three months is Mount Roskill, in central Auckland. Its average property value fell 8.2% ($117,000) to $1.314m. The suburb that dropped the most in dollars was Whitford, on Auckland's south east fringe. Its average property value fell $256,000 (-6.6%) to $3.637m. All up, 289 suburbs saw value declines or zero growth in the last three months, up from 105 in the three months to the end of March. The majority of value drops were in Auckland (138 suburbs), but also feeling the pinch this quarter were Christchurch, Lower Hutt, Palmerston North and Tauranga. The biggest faller outside of Auckland was Normandale in Lower Hutt, down $61,000 (-5.2%) to $1.108m.
Low sales volumes are contributing to the value slide: in the 12 months to the end of April 990 suburbs recorded 20 or more sales, down from 1130 in the 12 months to the end of March. (Total settled sales for the 12 months to the end of April was 109,238, down from 112,836 in the 12 months to the end of March.)
* Figures only cover suburbs with 20-plus settled sales in the last 12 months.
------------
Northland is the country's best-performing housing market, with the region's average property value growing 5.8% ($51,000) in the three months to the end of April to $923,000. But the quarterly growth figure has slid from the 7.4% achieved in the three months to the end of March, indicating fatigue in the market.
The region's strong showing has largely been driven by strong market activity in beach locations in Kaipara and Whangarei. Kaipara's average property value rose 7.6% ($71,000) over the last three months to $1.007m, while Whangarei's inched closer to the million-dollar mark after growth of 6.9% took it to $986,000.
Value growth in the Far North slid from 5.2% in the three months to the end of March to 2.8% in the three months to the end of April.
Of the 57 Northland suburbs that saw 20 or more sales in the last 12 months, four - Kauri, Langs Beach, Ngunguru, Mangawhai and Tutukaka - enjoyed value growth of more than 10% over the quarter. At the other end of the spectrum, Kaitaia, in the Far North, slipped into negative growth territory, with its average property value dipping 0.7% ($3000) to $429,000.
------------
Six months ago, property values in Auckland were growing at a rate of 7.6% per quarter. The change in the city's housing market has been sudden and, for some suburbs, ugly.
Five of the region's seven former local government areas recorded negative growth over the last three months, with the decline in Auckland City, Manukau, North Shore and Waitakere below the city-wide average, and accelerating, but only 0.5% in Papakura.
Value growth in Rodney and Franklin was 0.3%, and while it's likely both will enter negative growth territory in the coming months, their comedown has been gentler than the rest of the city.
Property values in 138 of the city's suburbs dropped over the quarter - up from 58 in the three months to the end of March. The slump also knocked three suburbs - Papakura, Papatoetoe, Manurewa - out of the $1m club, and one – Westmere - out of the $3m club.
------------
Waikato's average property value is $6000 shy of hitting the $1m mark, but growth of 2.2% over the quarter is well down on the 6% it was enjoying at the end of the year.
Five of the region's territorial authorities have seen value growth of 4% and above, but Hamilton's drift into negative growth territory, and weak activity in Waikato, South Waikato and Waipa TAs have dragged the region's overall average property value down.
Hamilton's average property value dropped 0.5% ($5000) to $921,000, down from growth of 2.6% in the three months to the end of March. Of the 32 suburbs in the city that saw 20 or more sales in the last 12 months, 11 suffered declines in their average property value. The worst hit was Rototuna North: its average property value fell 4.4% ($56,000) to $1.205m. A further eight suburbs and towns outside of Hamilton saw value drops over the quarter, including Raglan (down 3.1% or $40,000) and Cambridge (down 2%, or $26,000).
Hauraki was the region's strongest performing TA. Its average property value jumped 8.2% ($64,000) over the last three months, although this was down on the 12% growth seen in the three months to the end of March.
The TA was home to the region's two best-performing suburbs: Whiritoa, where the average property value rose 13.4% ($136,000) to $1.153m, and Kerepehi, which was up 9.5% ($53,000) to $608,000.
------------
House price growth in the Bay of Plenty slowed to 2.2% over the quarter, but the region's average property value of $1.081m is still up 21.2% ($189,000) year on year.
Ōpōtiki is bearing the brunt of the market slowdown in the region, with the average property value in the largely rural TA falling 2.2% ($14,000) to $623,000. Also feeling downwards pressure is Tauranga. The city's average property value barely grew over the quarter (up just 0.6% to $1.243m), and four of its suburbs suffered value declines. The biggest faller was Mount Maunganui, but its 2.5% value drop only takes it back to November levels, and most long-term homeowners in the beach suburb will be looking at the five-year growth figure of 84% (+$766,000).
Bouncing back from the slump is Rotorua. The city's average property value was up 4.4% ($33,000) to $782,000, a stunning turnaround after months of little to no growth at all.
More than a third of Rotorua's suburbs enjoyed value growth above the city-wide average, with Lynmore's average property value up 9% ($82,000) to $992,000, and Matipo Heights up 8.4% ($86,000) to $1.109m.
------------
The market come-down can be seen in the quarterly growth figures for Gisborne, Hawke's Bay, Manawatu-Whanganui and Taranaki. Manawatu-Whanganui recorded the lowest value growth of the four but even Taranaki, where value growth was a solid 3.4%, is heading into winter at a slower pace, with its growth rate down from 6% in the three months to the end of March.
Similarly, value growth in Hawke's Bay dropped from 4.6% in the three months to March to 2.1% in the three months to April, fuelled by a drop-off in activity in two of the region's biggest markets, Napier and Hastings. Napier's average property was up just 1% over the quarter to $950,000, and is in danger of falling in the months ahead, with four of its suburbs already suffering value declines. Value growth in Hastings is also coming to a fast stop. In the closing months of last year, it was enjoying growth of between 5% and 7%, but in the last three months this has slowed to 2%, and Havelock North, which accounts for the bulk of transactions in the territory, has seen its average property value drop 1.6% ($23,000).
The region's lower priced markets have done better over the quarter: Central Hawke's Bay's average property value was up 5.4% to $760,000 and Wairoa's growth rate of 13.3% to $495,000 was the country's strongest.
The story is similar in Manawatu-Whanganui. Palmerston North's average property value fell 0.4% ($3000) to $808,000 while Ruapehu's average property value was up 13.2% to $463,000, admittedly on the back of far fewer sales.
Gisborne kept its head above water, but the majority of suburbs and towns in the region are running out of steam.
------------
House price growth in Greater Wellington over the quarter was a barely noticeable 0.5%, down from 2.9% in the three months to the end of March and 4.5% six months ago.
Values fell in four of the region's eight territorial authorities, with Lower Hutt suffering the biggest tumble. Its average property value was down 2.9% ($30,000) to just over $1m, and it is possible that it could slip out of the $1m club in the months ahead, as could Upper Hutt, which suffered a drop of 1.4% ($14,000) to $1.012m. The slides in Porirua and Kapiti Coast were less than 1%.
Property values fell in 47 Greater Wellington suburbs, up from five in the three months to the end of March. Of the 21 Lower Hutt suburbs that recorded 20 or more sales in the last 12 months, just one, Stokes Valley, saw value growth over the quarter. The biggest fallers were Normandale (down $61,000) and Waterloo (down $60,000). In Upper Hutt, values fell in 10 suburbs.
Value growth in the capital was a sluggish 2.1%, down from almost 5% in the three months to the end of March. Two of the city's biggest housing markets, Karori and Johnsonville, suffered value drops, but more than half a dozen suburbs around the city enjoyed value growth of more than 5% over the quarter.
------------
At the top of the South Island, house price growth was strongest in Marlborough. The region's average property value grew 2.8% over the quarter, just slightly down on the 3.2% growth rate recorded in the three months to the end of March. Nelson's average property value was up just 1.8% over the quarter while Tasman's barely grew at all. Both are likely to see value declines in the months ahead, although any dips will only knock the regions back to levels seen in the closing months of 2021.
West Coast's average property value was up 2.9% ($11,000) over the quarter, driven by strong market activity in Buller. Homeowners in the TA enjoyed value growth of 7.9%, with Carters Beach (up 12.7%) and Karamea (up 10.6%) the standout locations. Grey's value growth over the quarter was a solid 3.1%, although unlike Buller, its housing market is showing signs of fatigue, with value growth clearly slowing from the 7.5% seen in the three months to the end of March. Westland is the region's weakest market. Its rate of decline accelerated from 1.8% in the first three months of the year to 2.3% now.
------------
Canterbury's average property value grew 2.9% ($22,000) over the quarter to $787,000. The fact that the growth rate is only slightly down on the 3.2% recorded in the three months to the end of March suggests the overall market may escape the sudden downturn experienced elsewhere, although it should be noted that the growth rate six months ago was 6.5%.
Strong value growth in Selwyn and Waimakariri - 5.7% and 5% respectively - has helped pull up the overall figure, but property values barely changed in Timaru (up 0.4% over the quarter) and dropped more than 1% in Kaikoura and Mackenzie.
Christchurch's average property value was up 2.3% over the quarter, and 26.8% over the year, to $791,000, and even accounting for the slowdown, it's likely the city will cross the $800,000 mark in coming months.
However, house prices in some of the city's more populated, higher-value suburbs dropped over the quarter, including Fendalton (-$25,000), Merivale (-$15,000) and Kennedys Bush (-$11,000).
------------
Value growth in Otago has slowed from nearly 7% six months ago to 2% in the three months to the end of April. The story is the same in Southland, where the growth rate has tumbled from just over 6% to 2.9%. Growth in both regions is likely to stall in the coming months, with some TAs in danger of suffering value declines, as buyers retreat or act with significantly less urgency than they did in the closing months of 2021.
Top of the watch list in Otago are Dunedin and Queenstown-Lakes. Dunedin's average property value didn't budge over the quarter, and house prices dropped in almost half of the city's suburbs.
Value growth in Queenstown-Lakes was 3.6% over the quarter, and while that would normally be cause for celebration, the growth rate is well down on the 9.6% recorded in the three months to the end of March. The sharp slowdown could, however, be a blip and it's possible the opening up of New Zealand's borders and lifting of Covid restrictions will halt any further declines.
Also showing weakness in Otago is Clutha, where the average property value dropped 0.45% to $451,000.
Southland's best performing TA was Gore, where value growth was 4.1% over the quarter, up slightly on the 3.9% recorded in the first three months of the year.
