The latest update of Cotality’s Mapping the Market interactive tool, which provides suburb-level property insights across the country, shows 56% of suburbs recorded either stable or rising standalone house values over the three months to June.
However, while values remain broadly flat at a national level, Southland and West Coast housing markets dominated the list of the country’s strongest performers, accounting for 21 of the top 25 suburbs where house values have risen by at least 10% over the past year.
Nationally the median value of a standalone house fell 0.1% over the quarter and remains 17% below the peak to $834,199 (versus the overall median of $808,187).
Cotality NZ Chief Property Economist Kelvin Davidson said buyers remained in control of pricing negotiations after weaker than expected sales activity across the first 4-5 months of the year and elevated listings.
“It’s always difficult to cast a wide net across the various trends at a suburb level and come to a clear conclusion about just one or two key drivers,” he said.
“However, in many of those stronger performing suburbs, the two most likely factors for the double-digit growth are their affordability relative to the rest of the country and robust farming sector which is supporting cash flow and confidence.”
Affordable regional markets lead the way
Among the strongest performers for standalone houses over the past year were Lorneville in Invercargill, Wallacetown in Southland District, Ngahere in Grey District and Te Anau in Southland District, all recording annual growth of more than 14%.
Mr Davidson said affordability and local economic conditions were likely playing an important role in supporting demand across those markets.
“Many of the best performing suburbs are relatively affordable compared with larger urban centres, and their resistance to softer economic and overall market conditions could well be due to first home buyer activity and smaller-scale investors,” he said.
“We also know that areas linked to communities where there’s robust farming activity and strong regional economies have also generally been holding up well.”
Auckland encounters ongoing headwinds
While many regional markets have bucked the national trend, Auckland suburbs feature prominently among the country’s weakest performing areas.
For standalone houses, Wesley in Auckland City recorded an annual decline of 7.8%, while Wiri in Manukau fell 7.4% and Glen Innes declined 6.9%.
Mr Davidson said Auckland’s key restraints for values include a strong new supply pipeline and cautious buyer sentiment.
“Auckland experienced one of the strongest upswings during the pandemic period, which pushed values to very elevated levels and created significant affordability challenges for many buyers,” he said.
“Values for all property types across the city are now about 23% below their January 2022 peak of $1.36 million, but they remain above their pre-pandemic levels.”
Mixed results of townhouse values
For townhouses and flats, 52% of suburbs recorded either stable or rising values over the three months to June, an unchanged proportion from March.
Eleven suburbs recorded annual townhouse value growth of at least 10%, including Matua in Tauranga, Katikati in Western Bay of Plenty, Putaruru in South Waikato, Fernhill in Queenstown and Alexandra in Central Otago.
However, several suburbs also recorded annual declines of 10% or more, including Bader in Hamilton, Weymouth in Manukau and Auckland Central.
Mr Davidson said supply dynamics were a significant factor in the performance of townhouse markets across the country.
“In some locations, particularly where there has been a significant pipeline of new development, buyers are being presented with an array of choice which has placed ongoing restraint on values,” he said.
“Conversely in other area where there are more affordable price points and stronger local demand, the performance has been stronger, and in some cases positive, as there’s less stock and competition.”
“That being said, contrary to some perceptions out there, townhouses aren’t generally seeing their values underperform other property types.”
Wide ranging performances across NZ suburbs
Auckland still dominates the list of suburbs with the highest median values for houses, including $3.03m in Herne Bay, $2.87m in Saint Marys Bay, and $2.43m in Parnell.
Kelvin Heights makes an appearance for Queenstown, at $2.48m
At the other end of the spectrum, eight suburbs recorded median house values below $300,000, including Ikamatua in Buller, Clinton in Clutha and Waiouru in Ruapehu.
Auckland continues to account for the country’s highest townhouse values, with Stonefields leading the way at $1.29 million, ahead of Campbells Bay ($1.21 million) and Castor Bay ($1.17 million).
Outlook clouded by economic uncertainty
Mr Davidson said the outlook for the housing market remains closely tied to the wider economy and the path of interest rates, with the battle to contain inflation likely to influence market activity over the coming months.
“Recent Mapping the Market results highlight how varied conditions are around the country at present, and that variability could become even more pronounced if economic uncertainty persists,” he said.
“Higher mortgage rates and a weaker economy tend to place a greater emphasis on affordability, which is one reason we've seen some lower-priced markets perform better than others.”
He said elevated listings and subdued sales volumes were likely to remain key features of the market in the months ahead, helping to explain why some suburbs were outperforming and others had softened.
“Buyers generally still have a reasonable amount of choice, and that means some markets are finding it harder to generate price growth than others,” he said.
“The next three to six months are likely to bring more of the same patterns we've seen at a suburb level, with affordability remaining a key driver of demand and property values generally tracking sideways at a national level.”
