Property values across New Zealand have moderated further in June, according to the latest CoreLogic QV House Price Index.
The index shows a minor drop in the annual rate of change to 2.0% in June, from 2.3% at the end of May.
In Auckland, values continue to slip away, with the annual change dropping to -2.7% in June, from -2.1% at the end of May. Hamilton also saw a minor drop from the previous month (4.9% to 4.7%).
The other four main centres’ rates of growth increased, with Dunedin as the outright leader with a 12.2% increase over the past year. Wellington area remains strong at 7.9%, with larger increases in both Hutt City (11.3% p.a.) and Upper Hutt (15.0% p.a.). Wellington City and Porirua have lost some momentum with 6.0% p.a. and 6.8% p.a. respectively.
According to CoreLogic NZ head of research Nick Goodall, unaffordability and the near-elimination of foreign buyers across the country has had a significant impact outside the main centres.
Read more: Will the foreign buyer ban offset the impact of low mortgage rates?
In the Queenstown Lakes District, the annual change in property values is now in the negatives (albeit only marginally at -0.1%) for the first time since July 2011 in the wake of the Global Financial Crisis which impacted property values across the country.
“This will likely have a muted impact on recent home buyers, due to deposit requirements guarding against a negative equity situation, however it’s the potential impact longer term which will have owners nervous,” Goodall noted.
Similarly, values in Auckland City Central, where we also know foreign buyers were most active, are continuing to track backwards at a significant rate of -3.7% over the last three months, to take the annual rate of change down to -4.7%.
“We seem to be at somewhat of a crossroads in the market as we see a split in performance between different localities,” Goodall said. “The nationwide market influences, such as low interest rates, low unemployment and strong population growth are reducing in their impact as we see it’s certainly not a case of one trend to rule them all.
“It is now that the strength of each centre’s local economy starts to dictate future housing prospects.
“With any market cycle, it’s also important for owners and would-be-buyers alike to understand the different statistics available to them to evaluate the market accordingly,” he added.