PHOTO: Auckland townhouse
Falling house prices in Australia’s biggest cities has led to speculation that Auckland will follow. Auckland Council’s Chief Economist, David Norman compares the two markets.
The Auckland Unitary Plan was introduced in November 2016, enabling four times the city’s previous housing capacity. Aided by tighter exchange controls in China and loan-to-value restrictions on investors in New Zealand, land prices reduced by about 6 per cent in Auckland over the two years to 2018. The impact of this surge in development potential was immediate and Auckland house prices fell about 4.5 per cent from their peak in October 2016, staying flat since then.
Fast forward to March 2019, the proposed capital gains tax took Auckland prices down another (small) step. But with capital gains now off the table, we’ve seen a small resurgence in house prices.
Across the Tasman, Melbourne and Sydney saw their house prices peak between June 2017 and March 2018. Since then, prices have fallen 15 per cent and 10 per cent respectively. Perth prices have fallen 11 per cent since the end of the mining boom. Brisbane prices have recently flattened out, while Adelaide prices have risen most modestly and uniformly.
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