The NZ housing bubble bursts - prices drop by more than a QUARTER

Central Auckland house prices plummet, Real Estate Institute data shows

Stuff.co.nz

24 April, 2019

Property prices in some parts of Auckland have fallen by more than a quarter, year-on-year.

New data from the Real Estate Institute shows sales activity around the city in the six months to the end of March, compared to the same time the year before.

Mt Albert had the biggest price fall, from a median $1.170 million last year to $805,250 this year - a drop of 31.2 per cent.

Royal Oak had the next biggest drop, from $1.160m in 2018 to $865,000 this year, or 25.4 per cent.

Long Bay was in third place, with a price drop of 24.8 per cent. Even exclusive suburbs such as Herne Bay also reported price falls.

But other parts of the city still experienced price increases.

In Takapuna, the median price rose 30 per cent from $1m last year to $1.3m.

Onehunga was in second place, with an increase of 19.4 per cent. Other suburbs with rising prices included Morningside, Rosehill, Oteha, Milford, Glen Innes, Grafton and Stonefields.

Bindi Norwell, Real Estate Institure chief executive said Takapuna was often popular.

"But given the cooling house price growth which has been recorded on Auckland's North Shore recently, the latest figures may come as a surprise to some.

"As for Glen Innes, the Tamaki Regeneration programme is likely to have played a part in the significant price growth there as the community continues to see a number of new houses being built and the promise of a more attractive and sustainable place to live for existing and new residents of the area.

"While not showing as significant an increase as some other suburbs, Stonefields has been holding and growing its price, while others around it have been falling or growing at a much slower rate," she said.

She said it was not a surprise that some central suburbs had experienced price weakness.

"Suburbs such as Mount Eden, Westmere and Herne Bay have been slowly declining in price for a while now."

Infometrics economist Brad Olsen said it was "both surprising and not" to see the range of price changes.

He said there would be variation depending on the balance of unaffordability, buyer interest, availability of housing and access to credit.

"We've broadly expected that prices in the north of Auckland would see stronger price growth, simply because of the constrained supply and lack of new building volumes, compared to the south of Auckland where there is more land available and so more housing development potential.

"However, the complicating factor is the high levels of housing unaffordability in Auckland, which has been the driver of lower prices recently. We expect that potential buyers have hit the limits of what they're able to pay for housing – they'd like to pay more to secure a house, but simply can't access the funds for higher and higher prices. So as a result, vendors are readjusting their prices lower to secure a sale in some instances."

The data featured suburbs which have made a minimum of 20 sales in each given month of the year.

FASTEST FALLS

Prices were down...

Mt Albert: 31.2 per cent

Royal Oak: 25.4 per cent

Long Bay: 24.8 per cent

Westmere: 22.5 per cent

Kohimarama: 21 per cent

Parnell: 20.8 per cent

Albany: 20.5 per cent

Mt Eden: 20.1 per cent

Herne Bay: 17.2 per cent

Freemans Bay: 17 per cent

BIGGEST INCREASES:

Prices were up...

Takapuna: 30 per cent

Onehunga: 19.4 per cent

Morningside: 18.9 per cent

Rosehill: 14.7 per cent

Oteha: 14.1 per cent

Milford: 13.6 per cent

Glen Innes: 12.9 per cent

Grafton: 11.6 per cent

Stonefields: 10.5 per cent

Half Moon Bay: 10.4 per cent