Sharechat Logo

Falling Auckland prices depress national house price inflation

Thursday 6th June 2019

Text too small?

Falling house prices in all but the extreme outer suburbs of Auckland and the odd pockets of weakness elsewhere in the country are keeping a lid on national house price inflation.

The traditional winter lull in the market is also helping cap prices, Quotable Value says in its latest release which has yet to show the impact of the government’s decision to take a capital gains tax off the table or of the Reserve Bank’s rate cut in May.

“Our major centres are seeing the market soften, with Auckland continuing to record single-digit negative growth over the quarter and the capital city seeing values plateau over the last three months,” QV consultant Paul McCorry says.

“The rate of value growth has also started to slow in Dunedin following a succession of strong quarters. At the same time, many regional centres are still very much in the upward stage of their growth cycle and continue to attract plenty of buyer demand,” McCorry says in a statement.

QV’s official national index for May is up just 2.3 percent at $686,954 from a year earlier and barely up with 0.1 percent growth for the three months ended May.

QV says the figures are for May but its index is based on settled house sales and is prepared on a three-month rolling average basis, so its data can include house sales that went unconditional as long ago as February or even earlier.

The Real Estate Institute’s monthly data, which records unconditional sale agreements in May and so is more timely, will probably be released the week after next. It showed national annual house price inflation of 1.3 percent in April, with Auckland prices down 4.4 percent from a year earlier.

McCorry says it remains to be seen how much of the May rate cut banks will pass on to customers but “it is definitely good news for borrowers.”

There’s no doubt mortgage rates have fallen considerably. Most banks have two-year fixed mortgage rates, the most popular period for fixing, below 4 percent – ASB Bank’s “special” is currently 3.89 percent – compared with more than 5 percent a year ago.

The latest QV figures show prices on Auckland’s North Shore fell to $1,179,660, down 3.9 percent from a year ago. Prices in central Auckland city fell 4.3 percent to $1,054,828, but prices in Papakura rose 0.7 percent to $707,659 and prices in Rodney rose 0.6 percent to $959,625.

The data show prices in the main urban centres rose 1 percent to $790,282 in May while the biggest hot spots around the country include Kawerau, up 29.3 percent to $259,883, South Waikato, up 18 percent to $235,562, and Tararua, up 17.8 percent to $231,465.

Only one area in the South Island saw prices fall from a year ago - southwest Christchurch, which was down 0.4 percent at $472,749. The Taieri suburbs of Dunedin, up 13.6 percent to $474,468 on a year ago, and Invercargill, up 13.5 percent to $299,672, showed the fastest price growth.

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

14th October 2019 Morning Report
US earnings season starts amid glimmers of hope on trade, Brexit
Class action suit against CBL Corp about to launch
NZ dollar benefits from possible US-China trade deal
MARKET CLOSE: NZ shares rise; Sky TV recovers on rugby rights rumour
NZ dollar firms: Trump says China trade talks are
Kiwis spend more than expected in September
Red tape and levies cut in first phase of major Building Act overhaul
More dairy needed to achieve sustainable global diet - Fonterra
New Zealand manufacturers still struggling

IRG See IRG research reports