Central Auckland house prices fall fastest: QV

Tuesday, 15 January 2019

In Auckland, prices in the sought-after central suburbs dropped by 1 per cent in December compared to the year before.

The priciest parts of Auckland suffered the most price weakness over the past year, new data shows.

QV has released its latest statistics, which show that nationwide, residential property values finished 2018 up 3.2 per cent on the year before.

But the value increases were not consistent across the country.

In Auckland, prices were down 0.4 per cent in December compared to December 2017. In Wellington, they were up 7.4 per cent, in Dunedin up 11.2 per cent, Tauranga up 3.9 per cent and in Hamilton, up 5 per cent.

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Christchurch property values were also up slightly over the year.

In Wellington, Upper Hutt was the area of fastest value growth.

There was also variation within centres.

In Auckland, prices in the sought-after central suburbs dropped by 1 per cent in December compared to the year before. Waitakere's fell only 0.2 per cent, while prices were up 1.2 per cent in Manukau, 0.6 per cent in Papakura, and 1.1 per cent in Franklin and Rodney.

Nick Goodall, head of research at QV's parent company Corelogic, said affordability was the main driver of central Auckland's fall.

'When credit is tighter, fewer can afford to buy at that level.'

The average Auckland property value is still more than $1 million.

Economist Gareth Kiernan said data from Auckland real estate agency Barfoot & Thompson had indicated there were not a lot of buyers in the city at the moment. In December, the agency turned over 504 properties, down from 674 a year earlier.

'I wonder if where prices are is keeping buyers out of the market. The affordability situation is really bad so there are not a lot of buyers.'

While the city's under-supply of housing should be expected to limit price falls, that absence of people wanting to purchase could mean the 'floor' it would put under prices had not yet been reached.

If the dearth of buyers continued it would put more downward pressure on Auckland prices than had otherwise been expected, he said.

But Goodall said sellers' stubbornness would put a floor under how far prices could fall in central Auckland.

People who owned the city's more expensive properties could be less likely to be forced to sell, he said, so while they might wait longer for an acceptable option, or take a property off the market, prices would not plummet.

QV's Auckland property consultant Hugh Robson said the market was holding firm. Well-presented properties close to services and amenities were selling well.

'Investor demand appears to remain fairly steady although possibly it's eased back over the past few months.'

In Wellington, Upper Hutt was the area of fastest value growth.

Goodall said he expected 2019 to bring more of the same as 2018 for the property market across the country.

The low level of available listings in Wellington would stop prices falling there, he said.

QV general manager David Nagel said the loosening of lending restrictions on January 1, which increased the percentage of lending that can go to owner-occupiers and investors with smaller deposits, could make the property market busier through the early stages of this year.

'[It] should enable some new first home buyers and investors to enter the market in the coming months. I don't anticipate this impact to be overly significant, but it may help drive a busy property market in the early stages of 2019,' he said.