The price gap between the upper and lower end of the housing market is growing across most of New Zealand’s main centres, according to new research from Quotable Value (QV).
In central Auckland, the average house price in the upper quartile grew by $490,936 (18%) in the 12 months to January 2021. At the same time, the lower quartile average increased by only $123,827 (15%).
According to QV, most of that growth came during the second half of the year, with upper and lower quartiles keeping relatively in step until August.
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Meanwhile, Wellington saw average house price in the upper quartile rise by $242,766 (17%) over the past six months, while the corresponding average in the lower quartile has risen by only $92,814 (13%).
And one of the largest gaps between upper and lower quartiles was seen in Queenstown. According to figures from QV, in the 12 months to January 2021, the average property price in the upper quartile in Queenstown increased by a whopping $228,476 (10%), while the lower quartile added merely $15,658 to its average price (2.1%).
David Nagel, general manager at QV, said that, while there is still plenty of competition between first-home buyers and investors, the housing market seems to be “getting to the stage now where many of them are reaching their affordability and credit limits.”
“While prices are still on the up, they have stopped going through the roof at such a strong rate as we previously saw throughout 2020,” said Nagel. “Instead, now we’re seeing the limited supply of higher-end stock being subjected to greater price pressure, which is the reverse of what we saw previously. This is probably both a ‘catch-up’, as well as a result of listing shortages.”
There are exceptions though – with figures from QV showing a “completely different story in Christchurch,” where the lower quartile (with 13.6% growth) has consistently been out-performing the upper quartile (with 9.4% growth) over the past 12 months.
Dunedin is another exception to the growing gap between upper and lower quartiles in the country’s main centres – in the 12 months to January, the upper quartile average increased by $96,973 (12.1%) while the lower quartile increased by $61,207 (16.9%).