CoreLogic has described 2023 as a 'year of two halves' for New Zealand's property market.
Their report, titled '2023: A turning point for the NZ housing market', reviewed 2023 and shared predictions for 2024, whilst also looking at data that revealed the New Zealand suburbs that have increased in value the most.
While it was a slow year for property, these areas of New Zealand managed to buck the trend and still increase in value the most on average over the past 12 months:
- Sunshine Bay (Queenstown) +6.6 percent
- Karoro (Greymouth) +3.9 percent
- Lake Hayes Estate (Queenstown) +3.8 percent
- Mataura (Gore) +3.4 percent
- Mornington (Wellington) +3.0 percent
- Albert Town (Queenstown) +2.6 percent
- Cromwell +2.6 percent
- Westport +2.5 percent
- Kingston (Wellington) +2.4 percent
- Lake Hāwea +2.3 percent
These areas experienced drops in value over the last 12 months:
- Featherston -16.0 percent
- Marton -15.3 percent
- Raumanga (Whangarei) -13.4 percent
- Glendowie (Auckland) -13.0 percent
- Ostend (Auckland) -12.8 percent
- Petone -12.8 percent
- Karaka Bays (Wellington) -12.5 percent
- Martinborough -12.5 percent
- Matakana (Auckland) -12.4 percent
- Pahiatua -12.4 percent
CoreLogic's report said the national property value increase was 0.4 percent in October and in 0.7 percent in November.
Zooming out, we can see the areas of the country that have gained the most value over the past five years.
- Mataura (Gore) +138.9 percent
- Raetihi (Ruapehu) +128.1 percent
- Wairoa +125.2 percent
- Waverley (South Taranaki) +122.6 percent
- Elgin (Gisborne) +122.3 percent
- Outer Kaiti (Gisborne) +118.6 percent
- Pātea +118.3 percent
- Mangakino (Taupō) +114.4 percent
- Manunui (Ruapehu) +110.5 percent
- Reefton +106.1 percent
Interestingly, three Auckland suburbs near the CBD are the only ones in the country to have lost value over the past five years, while other Auckland suburbs and Wellington Central have experienced low growth.
- Auckland Central -8.8 percent
- Newmarket -3.1 percent
- Grafton -2.3 percent
- Waiake +3.4 percent
- Campbells Bay +6.0 percent
- Wellington Central +6.1 percent
- Rothesay Bay +7.0 percent
- Mission Bay +7.4 percent
- Eden Terrace +7.5 percent
- Ōrākei +7.7 percent
The most expensive suburbs in New Zealand in 2023 were still all in Auckland though (median value):
- Herne Bay $3,161,400
- Saint Marys Bay $2,697,500
- Remuera $2,451,850
- Westmere $2,377,700
- Ponsonby $2,347,550
- Campbells Bay $2,097,150
- Shamrock Park $2,094,900
- Ōrākei $2,048,550
- Kohimarama $2,039,900
- Takapuna $2,027,800
These were the most affordable areas of the country in 2023 (median value):
- Cobden (Greymouth) $258,200
- Blaketown (Greymouth) $277,750
- Pātea (South Taranaki) $292,800
- Mataura (Gore) $294,000
- Wairoa $297,050
- Appleby (Invercargill) $319,650
- Manunui (Ruapehu) $324,850
- Westport $324,950
- Manaia (South Taranaki) $328,600
- Kew (Invercargill) $333,950
CoreLogic noted that declining property sale volumes and house prices characterised the first half of 2023 before finding a floor in the middle of the year.
Sales volumes hit their lowest in around 40 years in April, with "a 12-month moving total of just 60,475 while national property values declined a further 5 percent over the year".
From May and June onwards, market conditions began to change, which they said was due to "changes in credit cost and mortgage availability".
"Sales volumes are now rising pretty consistently from month to month, although from such a low base, even strong percentage gains of 10-15 percent haven't yet translated into large increases in the number of deals," CoreLogic NZ chief property economist Kelvin Davidson said.
Part of the rebound in 2023 was due to the surge in net migration to New Zealand.
Annual net migration to New Zealand hit a record high of more than 128,000, data from Tuesday revealed.
CoreLogic's report said the increased migration "hasn't necessarily kickstarted sales volumes or house prices on its own, but there are certainly signs that it's put significant pressure on an already-constrained supply of rental property".
While this is attractive for landlords whose rental prices will continue to increase, it's unwelcome news for tenants.
The biggest acceleration in rent prices in 2023 can be seen in these areas across the motu:
- Fairview Heights (Auckland) +32.4 percent
- Auckland Central +31.1 percent
- Fendalton (Christchurch) 30.0 percent
- Wānaka +29.3 percent
- Frankleigh Park (New Plymouth) +25.0 percent
- Jacks Point (Queenstown) +20.6 percent
- Lyttelton (Christchurch) +20.4 percent
- Birchville (Upper Hutt) +20.0 percent
- Camborne (Porirua) +20.0 percent
- Picton +19.8 percent
These areas of the country had their average rent decrease by the most in 2023:
- Herne Bay (Auckland) -14.5 percent
- Solway (Masterton) -7.6 percent
- Point Chevalier (Auckland) -6.7 percent
- Boulcott (Lower Hutt) -6.5 percent
- Crofton Downs (Wellington) -6.3 percent
- Māpua (Tasman) -5.7 percent
- Lynfield (Auckland) -5.0 percent
- Wilton (Wellington) -4.8 percent
- Silverstream (Upper Hutt) -4.4 percent
- Oriental Bay (Wellington) -4.4 percent
Looking ahead to 2024, CoreLogic predicts an "underwhelming upturn".
As the housing market moves into its next phase, Davidson said the labour market and mortgage repricing processes will continue to play a big part.
"The New Year will likely kick off positively in terms of mood, with a new property-friendly Government looking to shorten the Brightline Test back to two years and steadily reinstate full mortgage interest deductibility," Davidson said.
The positive mood could pull investment back into the market, but Davidson said, "it's not likely to be a torrent due to low rental yields and high mortgage rates".
Investment is also not likely to crowd out first-home buyers, who "should still be able to find good opportunities".
"We're anticipating sales rising by perhaps 10 percent and prices seeing growth of around 5 percent, which is still below long-term average levels," Davidson said.
With gross rental yields still low, CoreLogic said that typical property investment purchases in 2024 will still have to be significantly topped up out of other income, creating a "real-world hurdle for investors, even if their 'mood' is more positive".
CoreLogic describes itself as "a leading, independent provider of property data and analytics".
It covers 99 percent of New Zealand's property market and holds more than 500 million decision points in its database.
The full report can be viewed on their website.
