PHOTO: FILE
- Auckland and Queenstown Lead the Luxury Market
Auckland and Queenstown continue to dominate New Zealand’s high-end property market. A recent analysis of the $1 million-plus housing markets shows that more than half of these sales are in Auckland, while Queenstown contributes 4%, despite representing just 0.6% of the country’s total housing stock. Notable Auckland suburbs like Herne Bay ($3.37m), Saint Marys Bay ($2.75m), and Remuera ($2.49m) top the list, with previously more affordable areas such as Onehunga ($1.06m) and Mangere Bridge ($1.17m) joining the seven-figure club.
Interestingly, Queenstown has a higher proportion of $1m-plus suburbs than Auckland, with nearly 90% of its suburbs reaching that price threshold.
- Banks Are Slowly Getting Busier In August, $6.2 billion in new mortgage lending activity was recorded, $400 million more than the same time last year. While interest-only lending remains stable, low-deposit lending is increasing, thanks to the relaxation of Loan-to-Value Ratio (LVR) rules in July. First-home buyers, in particular, have benefited, with 80% of low-deposit loans going to this group.
- The Economy Still Faces Challenges Despite the uptick in mortgage lending, New Zealand’s economic outlook remains cautious. The NZ Activity Index (NZAC) for August showed a 0.5% drop from last year, the second decline in three months. This points to potential challenges in the housing market, including uncertainty in the labor market, house prices, and sales.
- Jobs Data Could Be a Housing Market Indicator Stats NZ is set to release August’s filled jobs data. Any drop in employment would reinforce concerns about the housing market’s near-term performance.
- Dwelling Consents Might Hit Bottom Soon While the construction sector has been weak, there are signs that new dwelling approvals might soon hit a low, with actual construction workloads likely to follow later. August’s dwelling consent figures will be important to monitor.
Kelvin Davidson, Chief Economist at CoreLogic, continues to highlight the importance of increasing property supply to meet demand, particularly in high-demand urban areas. The new debt-to-income ratio caps will also be crucial in keeping house prices in check over the medium to long term.
SOURCE: ONEROOF