OneRoof property report: How long will it take the housing market to recover from Covid-19?
House prices may have surprised most pundits by climbing back to near-record highs post the Covid-19 lockdown but new data suggests the rebound is running out of steam.
Auckland prices have now remained flat in the past month, an exclusive new house-price index by analysts OneRoof and Valocity shows.
The index - created to track house price changes following New Zealand's lockdown - showed Auckland's housing market had earlier been booming heading into the crisis, with values rising in 97 per cent of city suburbs.
Since lockdown, however, just one-quarter of city suburbs or 71 out of 276 had continued to rise in value.
Still, the fact Auckland prices are mostly flat rather than falling is remarkable in itself.
Economists had earlier tipped house prices would fall between 7 and 15 per cent by the end of the year as the lockdown and business uncertainty led to mounting job losses and economic pain.
Auckland house prices have beaten expectations since the Covid-19 lockdown but now new data suggests the recovery has been brought to a halt. Photo / 123RF
And - according to the OneRoof-Valocity index - Auckland prices did indeed take a sharp dip at the end of the level 4 lockdown in April.
However, prices then quickly climbed back to pre-crisis levels before levelling off over the past month.
Owen Vaughan, editor of NZME-owned property website OneRoof, admitted he was among those with a gut feeling that prices would fall post-lockdown.
However, Vaughan said he was surprised by real estate agent and mortgage broker reports that they were flat out, with crowds flocking to open homes and auctions, and first-home buyers keen to invest.
Recent reports have highlighted a number of homes on large blocks selling at prices well above their council valuations.
Barry Thom and Grant Lynch, directors of UP Real Estate, were gung-ho about prospects.
In the OneRoof Property Report, published in Monday's Herald, they suggest there is "little downside, if any" for the Auckland market, saying buyer demand was high because record low interest rates made home ownership more affordable than in recent years.
Returning Kiwi expats were also boosting demand for homes, they said.
Peter Thompson, managing director of Barfoot & Thompson, was more nuanced, saying June had been a good sales month, but there was still uncertainty about what the market would do next.
Aucklanders were naturally hesitant to sell in uncertain conditions and this was unlikely to fully clear up until after September's general election, he said.
Westpac chief economist Dominick Stephens was still tipping prices to fall by 7 per cent by the year's end.
He said in June that house prices had done better than expected.
However, the economic downturn caused by the global pandemic was still likely to hit later in the year as the Government's wage subsidy scheme ended and businesses found it harder to make profits and were forced to cut jobs.
Valocity's Wilson tipped that prices were unlikely to rise much in the near future. But he also thought there were more buyers wanting to buy than homes were being listed for sale, which would stop prices dropping too far.
And if that held true, Auckland sellers would still likely get more for their homes than they did one year ago.
With June 2019 being a quiet month, median sales values this June were mostly well up on last year.
OneRoof-Valocity data showed almost 80 per cent of Auckland suburbs - or 218 out of 276 - now had median values higher than the same month last year.
Four per cent had median values the same as last year, while almost one-fifth (18 per cent or 48 suburbs) had dropped in price.
Kaiti in Gisborne was one of the nation's best-performing suburbs, with its median $335,000 house price, up 29 per cent on the same time last year. Photo / 123RF
Herne Bay was the best-performing suburb among those with at least 40 house sales in the past 12 months.
Its median value hit $2.6 million, up 17 per cent compared to last year.
Royal Oak was the next best with its $1.2m price up 14 per cent, followed by One Tree Hill with its $1.1m price up 12 per cent.
Nationally, Marton, located between Palmerston North and Whanganui, was the best performer among suburbs with at least 40 sales as its $335,000 median price jumped 37 per cent year on year.
Flaxmere, in Hastings, leapt 34 per cent year on year to a $355,000 median value, while Gisborne's Kaiti suburb hit $335,000, up 29 per cent.
• See Monday's OneRoof Property Report for more insights and data.
