Auck­land­drop shows price risk

Wairarapa News - - FRONT PAGE - SU­SAN ED­MUNDS

New data shows Auck­land’s house prices have fallen, year-onyear, for the first time since 2011 and Wairarapa’s re­cently growth may be at risk.

Econ­o­mists say the largest city could lead the rest of the coun­try into a de­cline in house prices. But some ar­eas are more ex­posed than oth­ers.

Though not among In­fo­met­rics’ Top 10 at risk of value de­cline, South Wairarapa has ex­pe­ri­enced huge gains in the last cou­ple of years, but un­like Auck­land, it has not had the ac­com­pa­ny­ing pop­u­la­tion growth.

South Wairarapa District had 45.7 per cent value growth, 5.8 per cent pop­u­la­tion growth but a 7.7 per cent in­crease in stock.

Nick Goodall, head of re­search at CoreLogic, said there were a num­ber of ar­eas that had seen strong growth in prices but rel­a­tively re­strained pop­u­la­tion growth, which could sug­gest an over-in­vest­ment in prop­erty.

In­fo­met­rics chief fore­caster Gareth Kier­nan com­piled a list of the top 10 places most vul­ner­a­ble to price falls. Wairoa topped the list. There, house prices had risen 22 per cent be­tween Septem­ber 2014 and March 2017.

Most vul­ner­a­ble

Wairoa: House prices up 22% be­tween Sep 2014 and Mar 2017

Gore: House prices up 18% be­tween Dec 2014 and Jun 2017

Kaw­erau: Up 79% be­tween Dec 2014 and Jun 2017

SouthWaikato: Up 66% be­tween Jun 2014 and Jun 2017

Ti­maru: Up 47% be­tween Dec 2010 and Jun 2017

Ash­bur­ton: Up 42% be­tween Dec 2010 and Sep 2016

In­ver­cargill: Up 18% be­tween Mar 2015 and Mar 2017

Waitaki: Up 35% be­tween Jun 2013 and Jun 2017

Hamil­ton: Up 69% be­tween Jun 2011 and Jun 2017

Cen­tral Otago: Up 62% be­tween Sep 2011 and Jun 2017

That was fol­lowed by Gore and Kaw­erau, South Waikato, Ti­maru and Ash­bur­ton.

‘‘There’s a com­mon theme among the top eight - to vary­ing de­grees - that they’re smaller out­ly­ing ar­eas that have been caught up in the tail end of the boom, with­out any real solid fun­da­men­tals to jus­tify the lift – pop­u­la­tion growth might have been rea­son­ably strong, but not to the de­gree that jus­ti­fies some of the house prices lifts we’ve seen,’’ Kier­nan said.

‘‘Ti­maru and Ash­bur­ton are ob­vi­ously a lit­tle dif­fer­ent as they’ve had the quake refugee ef­fect in early years as well, but then changes around ir­ri­ga­tion/ wa­ter pol­icy could have po­ten­tial neg­a­tive ef­fects for their economies over the medium-term.’’

Even Hamil­ton and Cen­tral Otago reg­is­tered as a po­ten­tial con­cern, he said, and fea­tured at nine and 10 on the list.

‘‘Hamil­ton and Cen­tral Otago re­flect spillovers from nearby boom­ing mar­kets that have helped drive their own mar­kets up. How­ever, they are vul­ner­a­ble to slow­downs in the Auck­land and Queen­stown mar­kets.’’

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.