Auckland house prices roll back as Wellington's surge
Auckland's house prices continue to slide while Wellington and Dunedin's property markets go from strength to strength, new OneRoof-Valocity figures show.
The median sale price of Auckland properties rolled back to $830,000 in March, a drop of four percent on the year before, while the number of properties sold dropped 25 percent on the same period.
Nationwide, the median sale price for March was $540,000, the same as the month before and about 1.9 percent up year on year.
The only main urban centres to show above average growth were Wellington (up 11.3 percent year on year to $640,000) and Dunedin (up 7.1 percent year on year to $402,100).
Activity in the remaining main urban centres was flat, with the median sale in Hamilton and Christchurch up on the year before only marginally (1.9 percent and 2.7 percent respectively), while Tauranga's median sale price dipped just 0.8 percent to $638,000.
The figures showed the boom effect is still in play in the smaller urban markets, with Manawatu/Whanganui, Gisborne, Hawke's Bay and Otago all registering double digit growth.
OneRoof editor Owen Vaughan says: "The regions are still very much in catch-up mode, and will be for much of 2019, but it's likely that those markets too will feel the effects of the slowdown.
"The weaknesses evident in Auckland can be attributed to feelings of uncertainty and nervousness within the market, especially around the Tax Working Group's capital gains tax recommendations and the Government's moves to remove tax breaks for landlords."
Valocity head of valuations and innovation James Wilson said that although first home buyers still accounted for the largest share of new mortgage registrations the fact that investors and movers were in decline was further evidence that a "wait and see approach" had taken hold in the market.
"There is much debate about the potential implications of the Tax Working Group's recommendations and there appears to be a real need for clarity from the Government around capital gains tax.
"Also causing angst, among private and public landlords, is the healthy homes legislation and the potential cost implications."
Vaughan says the surge in Wellington house prices can be attributed to its strong employment market combined with its relative affordability compared to Auckland. "Wellington is a more appealing market to first-home buyers, who represent a third of all new mortgage registrations - well above Auckland levels. It's a similar story in Dunedin," he says.
However, in line with the national trend, sales volumes for both cities continue to trend downwards.
Wilson says indications by the Reserve Bank of New Zealand that it may need to lower the OCR - still at 1.75 percent - sooner than initially predicted suggests there may be more room for first home buyers to fill the gaps left by investors and movers.
"Some retail banks are already pricing this into the interest rates they are offering, which may spark some life into certain sub markets."