A sharp downturn in New Zealand house prices is unlikely, but with recent figures suggesting slower growth or price drops in some housing markets and warnings being sounded about vulnerability in Australia, OneRoof.co.nz decided to look at the figures to see what a housing correction would look like in New Zealand and identify where the risk lies at a suburb level. The visualisation models the effect of various market scenarios - from a 10 percent lift in values to a 20 percent drop. Use the sliding scale to see the effect on median values in each suburb.
It must be stressed that this visualisation provides hypothetical scenarios, and is not a prediction of future market conditions. The likelihood of sharp declines across the New Zealand market are slim. An undersupply of residential housing and strong demand actually support current values and future growth.
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The good, the bad, the ugly: The market scenarios
5-10 percent rise:
Possible but unlikely. Would require a significant uptick in the economy and increased confidence in the lending sector.
0-5 percent rise:
Likely. In line with most bullish forecasts for the property market. Assumes continued surge in Dunedin and Wellington and increased demand in regional markets as well as improved performance in Christchurch and Auckland.
0-2 percent drop:
Likely. In line with most bearish forecasts. Assumes recently passed and planned legislation will have a drag effect on Auckland’s market and property investors.
2-5 percent drop:
Possible. Assumes the consequences of a capital gains tax, the removal of tax breaks for landlords and the foreign buyer ban are more severe than expected.
5-20 percent drop:
Unlikely. Would require major cataclysmic event, such as earthquake or massive failure in the banking system.
