Queenstown, Christchurch and Auckland could be the centres most at risk from a property downturn in a post-lockdown recession, while Invercargill, Hamilton and Whangarei may be the least riskiest centres, according to property data company CoreLogic.
The company considered four risk factors that could impact on how property markets in 16 cities throughout the country might be affected in a downturn, and then applied a weighted average to rank them from highest to lowest risk.
The four risk factors CoreLogic considered were how much of a contribution the accommodation and food services sectors contributed to each centre's economy, the recent percentage total of property purchases in each area by investors compared to the long term average, the percentage of all dwellings in each area that were listed on short term accommodation website Airbnb, and the percentage of total guest nights in each area that was due to international visitors.
Perhaps not surprisingly, Queenstown's property market was seen as most at risk from a downturn, by a considerable margin over other centres.
It was followed by Christchurch, Auckland, Dunedin, Palmerston North and Rotorua, which were the other higher risk centres in the rankings.
In the middle with moderate levels of risk were Tauranga, Kapiti Coast, Wellington, Nelson, New Plymouth and Napier, while the lowest risk centres were Hastings, Invercargill, Hamilton and Whangarei (see graph below for the rankings).
"Queenstown doesn't look good on this system and that supports the popular perception amongst commentators that its property market could be in for some major problems." CoreLogic said in its report.
"Rotorua is another candidate often suggested as being vulnerable, but on our measure it doesn't look any worse than some other parts of the country such as Christchurch, Auckland and Dunedin."
That's because Rotorua is not entirely dependent on tourism and had other industries underpinning its economy, the report said.
"Elsewhere, most of the main centres and a number of other main urban areas look to be on a par in terms of their vulnerability to a property market downturn, but Invercargill, Hamilton and Whangarei stand out as more resilient property markets in our basic weightings system."
CoreLogic admitted its rankings weren't an exact science and said other factors would also affect property markets in each area.
However the factors it had looked at would likely have a substantial impact on the property market's performance in a downturn.
.You can read CoreLogic's full report here.
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