Property Market Enters Spring On The Up – Overview: According to the CoreLogic House Price Index (HPI) for September, nationwide property values are showing signs of growth once again, increasing 0.8% over the month, after generally stalling since May.
Property values have held firm through the worst of the economic downturn following the strict lockdown policies implemented in March. The combination of low interest rates, access to credit and renewed confidence has seen demand hold firm.
Limited available supply, in the form of a low number of for-sale listings remains a key contributor to the property market’s resilience to lower values. Additionally, the absence of any meaningful lift in unemployment (yet) has minimised the number of urgent listings or strongly motivated vendors willing to discount their price.
The social restrictions placed on Auckland, and to a lesser extent the rest of the country, threatened to put a further dent in upcoming listings, however based on the trend in appraisals generated by real estate agents on CoreLogic platforms, the blip in activity in mid-August was relatively short lived and activity is now back to normal.
The lift in values witnessed at a nationwide level is generally also evident across each of the six main centres, with Tauranga the only exception, though the drop of -0.3% in September is very minor and essentially extends the recent trend of sideways movement in Tauranga since COVID hit (+0.3%).
Auckland’s stricter alert level status and subsequent reduction in economic activity provides a stark reminder we’re not completely out of the woods yet with the pandemic, and internationally we’ve seen the impact of subsequent outbreaks on economic conditions.
However property values in Auckland experienced a mini-uptick over the month (0.5%) – the first increase since the COVID-instigated weakness in the market. The rise in property values appears to be relatively broad based with 1.0% monthly growth in Waitakere (average value $864k) compared to 0.7% in both North Shore ($1.24m) and Franklin ($711k).
Index results as at September 30th 2020