APRIL- MAY 2022
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fter an initial four to five month period of housing uncertainty, the policy changes that were aimed at supporting the real economy – e.g. official cash rate cuts, quantitative easing, wage subsidies – also indirectly boosted the property market. Of course, direct measures such as the removal of loan to value ratio speed limits also played a key role, and since August 2020 the average national property value has risen by 41.6%, or $307,245. By territorial authority area, three have seen postCovid growth in average values in excess of 60% (Wairoa, South Wairarapa and Tararua), another 16 have had increases of at least 50%, and only one has been less than 25% (MacKenzie at 16.4%). In other words, it’s been a large and synchronised boom, reflecting common drivers, including low mortgage rates and tight listings. That upswing is now quickly giving way to a sharp slowdown, and as affordability constraints bite, mortgage interest rates rise, and credit availability tightens, outright falls in property values in some parts of the country could well be on the cards in the coming months. In other words, we now seem to be quickly shifting into a ‘buy62 propertyandbuild.com
What have two years of Covid taught us about property? It’s been a bizarre period for the housing market ever since New Zealand entered its first lockdown on 25 March 2020, with predictions of large falls in property values turning out to be way off track, CoreLogic Chief Economist Kelvin Davidson observes
er’s market’. What do the figures show? If we start with a simple comparison of apartments to flats, flats (think townhouses or terraced dwellings) have seen stronger growth in values. In fact, apartments in Auckland City, and the North Shore too, have been relatively subdued, only seeing growth in median values of 5-10% over the past two years. That’s likely to have reflected the par-
ticular pressures in those areas from the absence of foreign students and the weak short-stay accommodation market (without tourists). But in dollar terms, the levels are still pretty high – a budget of $700,000 would get you an apartment in Auckland City, but none of these other property types/ locations. Indeed, a flat on the North Shore is now pushing $1m. Apartments vs flats post-
COVID % change in median values Switching to a comparison of flats to houses, it’s generally the case across the main centres that houses have seen stronger growth – and also that Christchurch, Tauranga, and Wellington have been the most buoyant locations in absolute terms. However, that’s not universal, with flats in Christchurch and Dunedin actually seeing slightly
