KEY POINTS:
PMI Mortgage Insurance issued a report today on the state of the housing market. See below for what it said about your region.
* Northland
House price growth has slowed significantly over the last nine months, with a 1.7 per cent increase in the year to March 2008- the slowest in five years. Much of the Northland market's strength over the past five years was underpinned by demand for holiday or second homes, particularly from people living in Auckland. The Northland market is "likely to remain weak over the next two years."
* Auckland
High interest rates have placed "considerable stress" on the Auckland market. House sales are down 47.6 per cent on a year earlier, the largest decline of any region. A recovery in consumer confidence in 2009 is likely to lead to a more stable performance "heading into 2010".
* Waikato/Bay of Plenty/ Gisborne
Price growth is higher here than the national average, with a 3.7 per cent increase in the year to march. Momentum is slowing though, with reduced demand for holiday homes particularly affected the Bay of Plenty. Drought and "less population drift out of Auckland" is expected to leave price growth in this area "lagging behind the national average in 2009 and 2010."
* Hawke's Bay
The only region currently recording lower house prices than a year ago. Demand for coastal property and holiday homes contributed to a lot of the strength seen in the past few years. With lower price rises over the past two years, Hawke's Bay is "perhaps less at risk of significant price falls than some other parts of the country."
* Taranaki/Manawatu/Wanganui
High price rises over the last 4-5 years are starting to be reversed. "& it is clear that property in the region has become significantly overvalued. House prices are likely to be flat or falling over the next two years."
* Wellington
Low unemployment caused by Government workforce expansion has helped here, with median prices up 5 per cent on a year earlier. A change in government might reduce confidence and lead to price falls.
* Nelson/Marlborough
House prices here are up 6.7 per cent on a year earlier. Some house price falls likely as high interest rates constrain demand. Growing importance of Nelson as a service hub likely to underpin a robust performance for the region's housing market.
* Christchurch
House price growth has eased to 3.7 per cent in the March 2008 quarter and has not been lower since late 2002. The importance of manufacturing to the local economy may result in slower economic growth, which could lead to lower house prices.
* Provincial Canterbury/Westland
One of the country's strongest property markets. Median house prices in the March quarter up 8.3 per cent on the year before. Potential for an oversupply in housing developing. Higher than average price falls likely through to the end of 2009.
* Otago/Southland
Median prices up 12.6 per cent on the year before. Standout growth has been in Southland, where prices among the lowest in New Zealand are attracting investors. Rental yields are dropping though and along with an oversupply of high value properties in Central Otago, house price falls over the coming year are likely.
- NZ HERALD STAFF
