Property prices down in Auckland, up in regions

House prices in Auckland are down slightly over the past quarter, and has also been flat to lower in Tauranga and Christchurch and other urban areas except for Rotorua, Palmerston North, Dunedin and Invercargill.

RNZ: House price growth ‘runs out of puff’ in cities

Latest data from QV shows house price growth around the country slowing, with the national average climbing 4.3 percent in the year to September.

In Auckland, though values had grown 0.8 percent over the year, they dropped back in the last three months to an average of $1,039,066.

Values fell in a number of Auckland suburbs, including the North Shore and Waitakere, while rising in Rodney and the city centre.

QV national spokesperson David Nagel said the usual spring surge in listings had not happened yet.

“The reductions in quarterly value growth have extended from just the main centres last month to almost all the 15 major urban areas we track with the exception of Rotorua, Palmerston North, Dunedin and Invercargill,” he said.

Year-on-year growth was showing double digit gains in many provincial towns, but the quarterly figures revealed a gradual slowing of the property market in almost all city locations, he said.

“Values are reflecting small decreases in all but a few isolated pockets of Auckland while Tauranga and Christchurch have also shown a small decline over the past quarter.”

NZH: Auckland house values fall: lack of finance blamed

Auckland’s housing market stalled in the last three months with property values falling by 0.6 per cent and buyers unable to get finance being blamed.

The QV House Price Index showed Auckland values only rose a meagre 0.8 per cent in the last 12 months – the slowest pace of annual growth since April 2011.

Isn’t the flattening of prices in Auckland a good thing?  property inflation had been causing major problems.

Despite the drop, the average current value now stands at $1,039,066 – putting most houses out of the reach of first-home buyers.

Problems like that.

Nationally, values rose 1.1 per cent in the last three months to September and 4.3 per cent annually.

Last month, QV blamed winter, bank lending limits, the election and China’s crackdown on capital flows for national house value growth being the slowest in five years and Auckland values hitting their most glacial pace since 2011.

  • Hamilton values rose 1.3% in the last quarter and 3.2% in the last year.
  • Tauranga values fell 0.1% in the last quarter but rose 6.6% annually.
  • Wellington values rose 0.8% quarterly and 10.7% annually.
  • Rotorua values were up 4.5% quarterly and 16.2% annually.
  • Christchurch values fell 1% quarterly and 0.8% annually.
  • Queenstown Lakes values rose 0.7% quarterly and by 12.6% annually.

 

“House prices must drop”

There are more calls for house prices to drop, One of the latest on the drop bandwagon is Don Brash.

Several day’s ago economist Arthur Grimes suggested that Auckland house prices should be “crashed” by 40%.

Stuff in Analysis: Can we have affordable houses without prices dropping sharply?

Grimes isn’t some crank – he’s a former Reserve Bank chairman and Auckland University professor, who says current estimates of housing shortages are “nonsensical” and won’t make homes affordable for young or poor families.

Political reaction.

“Crazy,” said Prime Minister John Key – why would we want to destroy people’s equity in their homes?

“Unnecessary,” said Labour leader Andrew Little.

Politically it would be very tricky. There are a lot of voters who have increased their wealth (on paper) significantly.

Yet in the same breath, Key, Little and others say they want to make it easier for first-home buyers to buy a place of their own, as average house prices in Auckland head towards the $1 million mark.

The only ways of appeasing both existing home owners and new or prospective home owners is by increasing house price inequality, or building houses and effectively giving them to new home seekers or at least heavily subsidising them.

Don Brash points out the problem.

The former National Party leader, who was Reserve Bank governor from 1998 to 2002, says MPs and others are being “dishonest” if they don’t admit that house prices need to fall.

While cities with affordable housing have median house prices which are three times the median household income, in Auckland the average house costs 10 times the average income – “wildly out of whack” as Brash puts it.

So it’s a political problem.

Most people won’t actually have a problem – if they don’t sell or buy then their property has only increased in value on paper and will only decrease in value on paper.

But people who have bought a house at the top of the price cycle will be severely disadvantaged, especially when they have to sell and buy somewhere else.

Brash says there are two ways to fix things.

One is a “very substantial fall in prices” – up to 60 per cent.

While that’s difficult to swallow, the alternative isn’t much better: if house prices hold steady, Brash says we’d need to wait 50 years – “half a century, two generations” – for incomes to slowly catch up.

“People who say they’re in favour of affordable housing but don’t want to admit the fact that the only way of achieving that is to see a big fall in house prices are frankly being dishonest.”

He concedes a fall would hurt some Kiwis, but says others are already hurting at the moment as a result of the skyrocketing prices.

“When you say you want to get house prices affordable, is there any way to do that without creating mayhem? The answer has to be no, but mayhem is being created now.”

So whatever is done and whatever happens there will be winners and losers (and for most things won’t actually change much).

As there have been over the past few years.