Source: Radio New Zealand
Thirty suburbs increased in value by more than 3 percent, many of which were in Otago. 123RF
Karitane, in Dunedin, and Blackball in Grey District experienced house value increases of 6 percent in the three months to March, while Little Wanganui, in Buller, dropped by the same amount.
It’s a mixed picture that shows the uneven nature of the housing market at the moment, property data firm Cotality said.
It has released its latest update of suburb-level house value data, which shows 56 percent of suburbs tracked had flat or rising standalone house values in the three months to March.
That is up from 44 percent three months earlier.
Cotality chief property economist Kelvin Davidson said it showed that while at a high level the market seemed to be trending sideways, buyers and sellers around the country would have varying experiences.
“The proportion of suburbs that have seen price increase is starting to grow a little bit. I think that’s consistent with what we’ve seen over the past couple of months in higher-level home value indices… perhaps signs of a little bit of growth there and it’s just reflecting that broadening out across more suburbs.”
Thirty suburbs increased in value by more than 3 percent, many of which were in Southland, Otago and the West Coast.
Davidson said relatively better affordability and the strength of the farming sector at a regional level had probably supported housing demand in those regions.
“Many areas where we are seeing growth are the sort of provincial regional areas where affordability is a bit better, the farming sector is going well which is supporting cash flow in those areas and just general economic activity and confidence.
“Affordability’s better, not only in terms of the absolute level of house prices, but in relation to incomes as well.
“So affordability is a bit more supportive, the underlying economy is a bit more supportive, so we’ve seen a bit more growth, as opposed to parts of the main centres where service activity is a bigger part of the economy, and that’s still struggling a little bit, and values are a bit more restrained in those areas.
He said lower mortgage rates were also likely to have helped confidence over the period.,
But he said it should be characterised as resilience rather than a boom.
In the main centres, Crofton Downs and Kelburn in Wellington were up 3 percent to 4 percent while Stillwater in Auckland and Aranui in Christchurch were up 2 percent.
Little Wanganui in Buller fell by around 6 percent, while Wellsford in Auckland’s Rodney district dropped by almost 3.5 percent.
“”When you drill down to suburb-level data, conditions become much more varied. Some areas are already seeing values stabilise or edge higher, while others remain softer depending on local economic conditions, supply levels and affordability,” Davidson said.
Among standalone houses, Herne Bay in Auckland was the country’s most expensive suburb, with a median house value of around $2.99 million, followed by Saint Mary’s Bay at $2.86 million.
At the other end of the spectrum, several suburbs had median house values below $300,000, including Patea in South Taranaki, Blackball in Grey District, and Clinton in Clutha.
Davidson said international conflict was likely to keep a lid on confidence in the short term.
“It’s not difficult to imagine that buyer and seller confidence remains pretty cautious, and common indicators a little bit better, mortgage rates are down, but that caution factor could hang around, or in fact even get a bit more cautious.
“You’d imagine that housing market indicators could well remain pretty soggy for the next little while too, so you’ll see how it plays out.
“We’re seeing property values pretty flat, rents pretty flat, house building costs are flat, so there’s lots of inflation concerns, but the housing market for once is not one of those concerns.
So that’s a bit of a silver lining for the Reserve Bank.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
