Aotearoa’s lifestyle and more affordable housing markets are among only a handful of suburbs to have defied the national property market downturn, as prices continued to fall across most of the country’s suburbs in the past three months.

CoreLogic NZ’s interactive Mapping the Market tool, updated quarterly, provides insight into how the value of property varies across cities, across the country, as well as how values have shifted over time.

In the latest update, 776 of the 948 New Zealand suburbs analysed recorded a fall in median values between September and December. The suburb of Kawakawa in the country’s Far North District had the highest percentage growth rate – up 6.5% - to a median of $469,550.

The lifestyle suburbs of Arrowtown and Lower Shotover, both in the South Island’s Queenstown-Lakes District, had the highest dollar increase for the quarter, increasing 4.9% and 4.8%, equivalent to $102,750 and $74,500 on average respectively.

CoreLogic NZ’s Chief Property Economist Kelvin Davidson said only 66 suburbs, about 7%, recorded a growth rate of 1% or more in the past three months, a low proportion which reiterated the acceleration of the housing downswing in 2022.

Of those, many were located in the country’s rural and more affordable southern districts, including 38 of those 66 suburbs, which have a current median value of $700,000 or less.

“These figures are the culmination of the lagged impact of rate rises, record inflation and other economic influences having an impact on the market,” Mr Davidson said.

“We knew it was coming and it’s been interesting to see it play out, with downward momentum widespread, but almost universal in our city centres with few areas able to escape the weakness.”

Over the past three months, 90% of Auckland suburbs (180 of 201) have seen their median property value drop – 73 of those suburbs have seen a fall of at least -2%. At the other end of the spectrum, only eight saw a rise of 1% or more.

Across the country, 56 suburbs recorded a fall in median value of 5% or more, with the two largest declines hitting Korokoro in Lower Hutt City and Mangakino in the Taupo District, which fell -10.2% and -10.7% respectively.

Quarterly value changes by main centre suburbs

Auckland

Herne Bay remains Auckland’s most expensive suburb (median value of $3,666,350), and has bucked the trend that’s occurred in 90% of the city, with a slight pickup in value of 0.5% since September. By contrast, areas such as Sunnyhills and Omaha have seen their median value drop by $70,000 or more over the past three months.

Hamilton

Over the past three months, all 34 suburbs in Hamilton have seen a fall in their median property value, ranging from -3.4% in Melville to -0.5% in Baverstock. In 13 of the 34 suburbs, the drop has been at least 2%.

Tauranga

Some parts of Tauranga have avoided median value falls in the past three months (Matua, Judea, and Bellevue), but the rest declined – ranging from -0.1% in Ohauiti to -2.7% in Tauranga South.

Wellington

There have been near universal falls in median property values across the wider Wellington area lately, with only Aotea, Waitangirua, and Cannons Creek (all in Porirua) having avoided declines since September. The remaining 91 suburbs all fell, and by at least 1.5%. The weakest was Korokoro, at -10.2%.

Seatoun remains the most expensive suburb, despite values dropping 4.0% in the past three months.

Christchurch

Roughly a quarter of Christchurch’s suburbs (21 out of 85 analysed) avoided recording a fall in values last quarter. The 3.2% falls in Hillmorton and Russley may have been the worst in the city, but were relatively mild compared to other parts of NZ.

Dunedin

Sixteen of 62 suburbs in Dunedin have avoided median value falls since September, while the worst declines (e.g. 3.1% in Waikouaiti) were mild compared to other parts of NZ. Even so, the momentum for the Dunedin market generally still seems to be downwards.

Market outlook

Mr Davidson said NZ’s economy and property market have clear challenges ahead in 2023, and the country’s labour market and mortgage rates may be the key drivers again, as they have been this year.

“The general outlook for the housing market remains weak, especially in light of the Reserve Bank’s predictions that the economy will enter a recession,” Mr Davidson said.

“Inflation is not expected to begin easing until the second half of next year and the official cash rate and unemployment levels will both increase. It’s a tricky combination for the property market and home owners alike.

“However, if large-scale job losses can be avoided, further falls in property values may be contained and possibly plateau in the second half of 2023. But pessimism would take over if employment did start to fall more sharply.”

Explore the full CoreLogic NZ interactive market map here. 

ENDS

Source: CoreLogic New Zealand