Property values have taken the biggest hits in some of New Zealand's wealthiest suburbs, according to CoreLogic's Mapping the Market tool.
It shows median dwelling values have fallen by more than $300,000 over the last 12 months in some of the country's most upmarket suburbs, such as Saint Mary's Bay, Orakei and Westmere in Auckland, and Seatoun and Karaka Bay in Wellington.
In the latest quarterly update to the Mapping the Market tool, which tracks median housing values on a suburb-by-suburb basis throughout the country, 10 suburbs recorded value drops of $300,000 or more, all of them in high end areas.
In percentage terms, the Wellington Region posted the most comprehensive value declines, accounting for 30 of the 31 suburbs where median values fell by 20% or more over the last 12 months.
The other suburb where the median value dropped by 20%+ was Fordlands in Rotorua.
However the decline in values was widespread, with more than a third of suburbs throughout the country posting double digit value declines.
"Overall, this confirms that this downturn has been pretty deep and broad-based across many parts of the country, to the detriment of existing property owners but a sign of hope for aspiring buyers who have their finances approved," CoreLogic NZ Chief Property Economist Kelvin Davidson said.
Going against the trend, four centres posted double digit gains in median values over the last 12 months.
All of them were small towns in the South Island - Tuatapere in Southland +11.2%, Reefton on the West Coast +10.6%, Waimate in South Canterbury +10.6% and Riverton in Southland +10.3%.
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60 Comments
"to the detriment of existing property owners but a sign of hope for aspiring buyers who have their finances approved,"
If a FHB has had his/her pre-approval reassessed (stress tested) to a smaller amount because of the higher interest rates - where's the advantage?
No current advantage, a long way off yet. I assume FBH are waiting for impending mortgagees. Serviceability currently greater than at the peak of one of the largest housing bubbles of recent times - tells you a little about downward pressure in the market. Where does the money come from? Let's see if there's a bank run and rates are cut - even then investor activity is constrained to usable equity in the fallout of a fallen market - given the amount of investor debt taken out over the last 5 years, the supporting metric will likely be cash in the bank.
Taking on less debt. Less risk of being in negative equity. Many FHBs, may have been uncomfortable buying at 25% higher prices due to the level of mortgage required in dollar value, rather than just looking at mortgage repayments.
Assuming a 25 year mortgage, the average interest rate would only be marginally higher with a mortgage from 2023 to 2048, rather than 2021 to 2046. So buy when rate are high and prices are lower.
Less deposit is required as well
Property has always been propped up in NZ by willingly turning a blind eye to the issues and solutions. But now finally the big unwind has started. Homes should go back to sustainable levels where average worker can dream of buying one.
Classic example of what can be done to solve the housing crisis in NZ but nothing gets done to preserve the portfolios of the 1% - similar to Hong Kong where there is unwillingness to do the right thing.
https://edition.cnn.com/2023/03/11/asia/hong-kong-pennys-bay-quarantine…
Homes will never be at a good " young persons" price in Auckland!.. unless your Asian ( worked your ass off), rich immigration, Maori ( government handout) or a crim
ahhh the boomer's retirement egg is whittling away... comeuppance for their greed while younger generations are left with nothing
-SMG.
Yip! We're still keeping the economy going while the gen Ys suffer due to their poor parents voting Labour!
House prices going up has been in the middle of the venn diagram for some time.
National said they would 'restore property investore interest deductability'. Ummmm LOL - Boomers be like "younger gens vote labour because they don't understand the economy" or "they are too green"
Boomers be voting for national so house prices stay on the rocket to imagination land.
-SMG.
The Boomer's are on borrowed time, so it makes perfect sense that their retirement eggs are whittling away. To say that younger generations are left with nothing is rubbish. When Boomer's move on, there is a glut in everything they touch - next thing will be retirement villages and funeral services.
I have often wondered about that. Unlike Boomers and Gen X, there seem to be more and more Millennial, Generation Y and Z cohorts who are putting off marriage, and having fewer or no children. Many of us will have read about the declining NZ and global population and NZ's ageing population in recent times (with one million, or roughly 1 in 5 people in NZ, to be aged 65+ by 2028, as projected by Stats NZ).
That is all to say the impact it will have on the housing stock and demand will be another interesting aspect to observe.
"When Boomer's move on, there is a glut in everything they touch - next thing will be retirement villages and funeral services"
And another hater post.
In a few years it will be the Boomers (who are still able to use computers) posting the hate:
Went to hosp today - waited 3 hours to see some foreign junior doctor for 3 mins who did nothing.
Still can't sell the flat and RE agent keeps telling me to drop price but why should I? - worked damned hard for that investment.
Bloody kids don't know how to knuckle down these days - that's our main problem - lazy ungrateful little bastards. Service in shops keeps getting worse.
There. I'm a Boomer too which is why I can easily roleplay the above.
You left out the inability to watch grandchildren grow up because they live in Perth, cos mum n dad couldn't afford a house in NZ.
I don’t know what boomers you associate with but most I know are hoping for a drop so the young can get themselves a home. Don’t confuse boomers with landlord people farmers
Boomer is a state of mind. We don't mind conferring honorary millennial status on the ones who have self-awareness and are capable of empathy for anyone they didn't sire or birth themselves.
"ahhh the boomer's retirement egg is whittling away... comeuppance for their greed"
Sure is a hater post.
Actually in Australia, most of retirement villages and funeral homes are owned by same venture capital funds - I am assuming same would be in NZ. In fact here, only 18% of funeral homes are now independent business!
Infact, the boomers’ retirement egg is doing very nicely with rents now higher than they’ve ever been - and the downward correction in property prices no where near the increase of 2020/21.
The vast majority of property investors of the past 20 years have done very nicely indeed. Those who got in during the ‘70s, ‘80s and 90s (or earlier) are on clover. 🍀
TTP
The greed and selfishness knows no bounds. Screw the renters and younger generation, at least the boomers are doing well.
NZ followed a political US decision and removed house prices from the CPI. We have new build costs but that is all.
Houses are the biggest consumer good.
All it has done is accentuate the interest rate swings. First too low and now too high as we chase some mythical measure of inflation while house prices tumble.
This is the correct answer. The decoupling of housing from monetary policy by removing it from CPI is astounding. We'll just see swings between asset inflation and 'the rest' inflation and people wonder why?!? Worst decision they could've ever made
Mentioned this for the RBNZ's spring monetary policy consultation, saw no mention of it being addressed (didn't expect it to, tbh)
But rent and housing construction is already included. Used houses are not consumer good so should not be in a consumer price index.
If we all lived in caves I would agree but we don’t.
All houses are consumer goods given that we all live in them, have to buy or rent them and their price far outweighs all other consumer products.
Having only rent and new build prices misses all those consumers that own homes, don’t rent and can’t afford a new build.
Critically it also misses the land price which is what inflates / deflates with interest rates and which home owners must also buy.
By that logic why is a rental property being rented a consumer good? It already exists
Because rent is a sunk cost. Property asset attract a long run capital gain.
Rent is included in the CPI
Soon be time for us rich boomers to buy buy buy ,. .
.so our gen Y kids can benefit. 😂😂😂
By 2021 the average boomer had already bought every property they could get their hands on. Right now their ability to buy will be severely constrained by a combo of rapidly shrinking equity + limited cashflow.
Sure, a minority would have sold out at the right time and now have cash to work with. Most simply aren't that financially savvy though.
Median housing values in upmarket suburbs such as Auckland's St Mary's Bay & Wellington's Karaka Bay down more than $300k over the last 12 months
Scratch wound
Scratch without remediation or treatment festers causing further issues with time.
Just a flesh wound
Ahh 300k is just chump change for these wealthy kiwis owning those houses.
Well it sort of is, after these same houses went up by over $1 Mill.
Well it sort of is, after these same houses went up by over $1 Mill.
Just your imagination Dr Y. What "went up" was an index based off limited data points from sales.
Well then by your logic, house values are not going down now either. You can't have it both ways, claiming that when house values rise the rise is not real, but then say when house values drop, the drop is real. Doesn't make sense
I think it's important to distinguish between the terms "price" and "value"
Are median prices even that meaningful? If more 3 storey shitboxes are being sold compared to standalone houses within a suburb, compared to a previous time, won't the median price drop? The REINZ index (which is also falling off a cliff in most areas) which normalises over property types, seems to be a much more accurate measure. What's up with CoreLogic, did they miss the day at school when stats was being taught?
Lies, damned lies and statistics. Crowds like CoreLogic and REINZ produce a wide range of property stats, including median prices and HPI. Journalists and real estate agents are free to pick and choose which set of statistics they use to best suit the story they want to tell.
$300k + drop in suburbs like St Marys Bay, is really not that surprising, given house values there, were over $3 Mill.
My 2021 CV $1.3M house in Wgtn is now valued $300k less at $1M (QV). However the CV had gone up $580k in 2021.
So your house is not worth what's it shouldn't have been anyway. Is this news...?
No, but very difficult for many people to understand
300k was price for a good 4 bedroom house 20 years ago, we are seeing the start of major meltdown in housing market with inflation sky high rates will continue upward trend.
Its a C R A S H !
Yes, it is a crash... of property, of governance & leadership, of civil society, of education, of institutions, of neighbourhoods, of families, of relationships, of morals, of.....
That sounded very boomery... and I am a boomer, but yeah its all turning to shit.
Unlike the good old days, where women and minorities knew their place, children could be given a good flogging, and nobody questioned the nice man who ran Sunday school classes.
Quite flaccid results indeed
"The other suburb where the median value drooped by 20%+ was Fordlands in Rotorua."
LoL.
Any guesses what the monthly HPI for Auckland will be down by on Wednesday?
-2.2% and HW2 will call it a great time to buy......
it's a start
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