house price index

PHOTO:  CoreLogic Head of Research, Nick Goodall

The latest data from the CoreLogic House Price Index (HPI) appears to justify the government’s recent announcement to tip the market in favour of first home buyers with sustained value growth through March, worsening affordability and a continuing decline in first home buyers’ share of the market.

According to the HPI, which is the most complete and robust measure of property value change in the market, nationwide values increased by a further 2.2% in March, which takes the annual growth rate to 16.1%, the highest rate of growth since January 2006.

This prolonged period of value increases provides a compelling backdrop to the Government’s recent housing announcement, which has been met first with shock and then with a mix of relief (for would-be first home buyers), concern (from renters) and criticism (from property investors).

KEY FACTS:

  • Monthly growth across Tauranga of 2.5% fully reversed the dip in February, with values now up 2.4% over the last three months.
  • A -2.4% monthly drop in average value in Gisborne, previously the standout area due to prolonged strong growth. However market fatigue may now be setting in, with the average value of $531k stretching affordability in our eastern most city.
  • Auckland’s average property values have risen by another 1.7% in March, which was smaller than February’s 2.9% increase, but still pushed the level above $1.2m for the first time.
  • Auckland’s affordability continues to worsen, and indeed first home buyers’ share of the market has started to wane. It has been about 23% so far in 2021, down sharply from a peak of 29% in Q3 last year (and 25% in Q4).
  • Wellington’s property values spiked higher yet again in March, with each of the main sub-markets seeing increases of at least 3%. The specific figures are 3.1% in Lower Hutt, 3.4% in Wellington City, 3.5% in Porirua, and 5.4% in Upper Hutt. On an annual basis, only Wellington City has seen a gain of less than 20%, but it’s hardly been weak either (up 17.4%). Upper Hutt’s rise over the past year has been 25.7%, or more than $161,000.
  • Across the country, there is now clearer evidence that these rampant gains are seeing more would-be first home buyers drop out of the market, either by choice or because prices have exceeded their borrowing capacity.

Main Centres

Change in property values Average Value
Month Quarter Annual
Auckland 1.7% 6.7% 14.4% $1,219,183
Hamilton 2.3% 8.1% 17.0% $729,243
Tauranga 2.5% 2.4% 16.2% $897,586
Wellington 3.5% 8.6% 19.9% $935,575
Christchurch 1.9% 6.7% 11.9% $575,721
Dunedin 1.6% 6.7% 15.4% $620,990

SEE THE FULL REPORT HERE:  March 2021 CoreLogic_NZ House Price Index 31 Mar 2021

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