HOUSING COMMENTARY By Miriam Bell
Cooling
HALO SPREADS
The Auckand market’s slowdown is now clearly spreading round the country, but Miriam Bell finds the consensus indicates the market is normalising rather than priming for a crash.
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ot too long ago it was hard to see an end in sight for New Zealand’s booming property market. But the latest wave of data leaves little room for doubt. The heady days of phenomenal price growth are slipping into the past. Not only has Auckland’s formerly over-heated market hit a much slower pace, but cooler times and reduced sales activity now characterise other major markets around the country. Don’t think this development is neccessarily bad news though. Growth has slowed, rather than stopped. Some regional markets continue to do well. In fact, experts say that
markets are normalising and becoming more balanced and buyer friendly.
STOCK UP, DEMAND DOWN
Just a couple of months ago, Auckland was alone in seeing an increase in the number of properties coming onto the market. That has now changed, according to the May data from realestate.co.nz data. Realestate.co.nz spokesperson Vanessa Taylor says the last time their data recorded an increase in total housing stock in a region outside of Auckland was back in October 2015. But their latest data shows that four other regions saw a lift in total housing stock in May, as compared to the same time last year.
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Housing stock in the Waikato was up by 18.9% while the Bay of Plenty saw a 5.1% increase in stock. Both Wellington and Canterbury also saw growth in the amount of stock on market, with increases of 13.2% and 4.1% respectively. While the remaining 14 regions all experienced a fall in housing stock in May, nationally the total number of homes for sale went up by 4% as compared to May 2016. With a 50.8% year-on-year increase in housing stock, Auckland probably contributed to the national rise. However, the rise in stock in Wellington, Waikato and the Bay of Plenty also coincided with a fall in demand in those regions, Taylor says. Of New Zealand’s 19 regions, these three – plus – Auckland sit at the bottom of the demand table and are the only areas which show a drop in demand. “Demand for housing in Auckland fell the most. It is down by 28.7%. But in Wellington demand has fallen by 14.1%, in the Waikato region it is down by 13.3% and in the Bay of Plenty it has dropped by 8.7%.”
MARKET FRENZY LIFTS
The May data from both QV and REINZ backs up Realestate.co.nz’s tale of reduced activity and cooling demand spreading to markets other than Auckland. According to the latest QV House Price Index, value growth has slowed dramatically. Annual value growth has now dropped to below 10% – both nationally and in Auckland. Once adjusted for inflation, the national average value was up by 7.4% year-on-year, leaving it at $634,018. That is the slowest rate of annual growth in two years. Likewise, in Auckland, value growth remained flat, with the average value coming in at $1,044,561 in May as compared to $1,045,362 in April. Once adjusted for inflation
