The property market is showing signs of an upward turn. Photo / Sylvie Whinray
Auckland’s housing market is turning in time for the traditionally busy spring season, with prices climbing in 76 suburbs in the past three months.
Property pundits had been tipping in recent months that city prices – which spent more than a year tumbling from record-high values in late 2021 – were beginning to rebound.
The new figures will be welcome news for homeowners. But for those wanting to enter the market, rising prices may add an additional hurdle as buyers already grapple with soaring interest rates.
New Zealand’s median house price took a more than $150,000 dive during a 15-month slowdown after the market peak in November 2021.
Real Estate Institute data shows prices hit a record high of $925,000, before falling 18 per cent to $762,000 in February this year and now sit at $767,000.
Auckland’s median price hit $1.3m in November 2021, before falling 27 per cent to $943,000 in January this year. It now sits at $1.01m.
But the latest data by analysts CoreLogic gives the best indication that a rebound is now under way, chief economist Kelvin Davidson said.
Birkdale on the North Shore, Stonefields and Howick in the east, and Ōtara in the south are among 13 Auckland suburbs where prices jumped by at least 2 per cent since June 1.
Luxury suburbs Herne Bay, Parnell and Ponsonby also experienced price jumps of at least 1.7 per cent over the past quarter.
The data showed prices rose in a diverse mix of “cheaper” and “pricier” suburbs, Davidson said.
“The housing market downturn seems to have affected both high-end and low-end suburbs, and the early signs of upturn are showing something similar,” he said.
The market rebound is also extending beyond Auckland.
CoreLogic found prices have risen in the past three months in 269 out of 924 suburbs across New Zealand.
“Back in June, 71 suburbs had recorded a rise of at least 0.5 per cent in the previous three months. But spring forward to September, and that count has risen to 188,” Davidson said.
Across the country, 29 suburbs experienced price rises of at least 2 per cent – 13 in Auckland, four in Wellington and 12 elsewhere.
Kiwbank chief economist Jarrod Kerr said the housing market was likely to pick up again now interest rates appeared unlikely to climb higher and migration had surged.
“Putting a stake in the ground, saying this is the bottom [of the market], I think we can do that now,” he said.
About 100,000 more people arrived in New Zealand over the past year than left.
And while New Zealand had been in a building boom in recent years, construction had cooled in the past 12 months because of high building costs and falling house prices, Kerr said.
“Every migrant that comes here either takes a rental or looks to buy,” he said.
“So we’re going back into a situation where demand and population growth is outstripping supply.
“That’s not good for affordability, it’s not what we need, but that puts upward pressure on prices.”
If the Reserve Bank begins lowering interest rates next year, that could further boost prices, he said.
While homeowners might be happy to see prices rebounding, “affordability is still a massive issue” for many, Kerr said.
Tom Rawson, director of Ray White AT Realty, said his agents in South Auckland noticed sales and prices picking up about two months back.
“We think we’ve come off the bottom of the market now,” he said.
“July was when we started to see some good prices and good sales activity starting back up.”
Sellers had been gaining increasing confidence as the speed of house price falls and the speed of interest rate hikes slowed, he said.
“We’ve seen steadiness with interest rates, steadiness with listing inquiries, steadiness with listings coming to the market for the last few months,” he said.
The increase in listings – or the number of new homes being put up for sale – had been particularly positive for sellers, Rawson said.
“That gives people confidence that if they sell, there is something out there they can buy.”
His team had such confidence in the market they were holding another mega-auction on October 10 – just four days before the 2023 Election.
The mega-auction will include 60 properties being auctioned in a marathon event that could take up to nine hours.
Rawson conceded the timing of the event so close to an election could be risky, given buyers and sellers had in past years been more cautious ahead of elections because of the uncertainty a change in government could bring.
However, his team were “over-subscribed” for the auction, having already locked in 60 sellers and having to turn away others wanting to sell their properties on the day.
At the last mega-auction on July 26, one buyer snapped up four homes, Rawson said.
Overall, 38 homes sold under the hammer for a total of $32 million.
Rawson said Ōtara had been one of the busiest suburbs his team had been working in over the past few months, backing up data from CoreLogic.
The CoreLogic stats showed Ōtara’s average value now sat at $746,300 or about $20,000 and 2.7 per cent higher than on June 1.
However, while prices have risen over the last three months, Ōtara’s average value is still 7.7 per cent lower than its $808,850 value this time last year.
Elsewhere in Auckland, tiny Herald Island in the northwest (up 3 per cent in the last quarter to $1.49m) and Maraetai (up 3 per cent to $1.47m) and Mellons Bay (up 3 per cent to $1.96m) in the east were the best-performing suburbs.
Birkdale was the next best, rising 2.7 per cent to $955,900, followed by Ōtara.
Ben Leahy is an Auckland-based journalist covering property. He has worked as a journalist for more than a decade in India, Australia and New Zealand.