The national housing market remained firm in August, following on from the steady July result.
According to the CoreLogic QV House Price Index, average property values rose by 0.2 percent from July to August, lifting the annual growth rate a touch from 2.2 percent to 2.3 percent.
A good way to characterise the August figures is, ‘business as usual’, and with sales activity still subdued (albeit showing slightly more encouraging signs of a pick-up) and affordability stretched, a solid but unspectacular result for values is no surprise.
The market in Auckland remains quiet in terms of activity, with neither sellers nor buyers generally in any rush to strike a deal. Of course, there are always some people who have to sell their property for family or job reasons and they’re likely to be feeling a bit of downwards price pressure.
Indeed, although Auckland average property values were flat from July to August, the latest figure ($1,025,193) was still -2.3 percent (or $23,981) lower than a year earlier.
Within the Auckland region, Franklin (0.3 percent annual change in average property values in August) is the only area yet to see any real downwards price pressure, although the falls to date in Papakura and Waitakere have also only been modest.
The greater weakness is still concentrated in Auckland City (-2.3 percent in the year to August) and North Shore (-3.4 percent) – although there were at least better results for the Auckland City Central and North Shore Coastal sub-areas in August.
CoreLogic senior property economist Kelvin Davidson said, “It’s largely been another steady-as-she-goes month for the housing market in August. The sluggishness of Auckland is weighing on the national picture, but away from our largest city, there are still many areas seeing consistent growth in average property values. Although the Reserve Bank delivered a shock 0.5 per cent official cash rate cut on August 7, the fact that fixed mortgage rates didn’t really budge meant that the immediate impulse for property values was always likely to be fairly muted.”
Around the remaining of the main centres, values ticked along in August. Dunedin is still a consistently strong performer, with growth in average property values of 11.9 per cent in the year to August. The average value in Dunedin now stands at $465,457, almost $166,000 higher than four years ago.
Wellington continues to climb steadily higher too (growth of 8.3 percent in the year to August), while Hamilton and Tauranga are churning away in the background with consistent annual growth in values of about 5 percent. In regards to Christchurch, Davidson said: “The ‘mood music’ around the garden city seems to have become a bit more optimistic in recent months, although it’s yet to show through clearly in the hard data – values only edged up by 0.4 percent in the year to August.”