News & Research

CoreLogic March Property Market & Economic Report

02 April 2018

New Zealand property values are holding up well and continuing to rise strongly in parts of the country despite subdued levels of actual property sales, according to the latest data from CoreLogic.

The company’s March Property and Economic Update Report shows values in Dunedin and Wellington are 9% higher than a year ago. It also shows Auckland has held broadly steady, Tauranga appears to be turning a corner, and values in Christchurch have edged down by 1% since February 2017.

Commenting on the CoreLogic NZ Property Market & Economic Update Report out today, head of research Nick Goodall comments: “Outside of value change, the construction industry remains a hot topic at the moment, with Kiwibuild and Minister Twyford at the forefront.”

“Auckland’s building consents remain on an upward trajectory, however, the housing shortfall may take several years to be eroded. 

“It remains to be seen how much of a genuine net boost to supply will come from KiwiBuild, either in Auckland or around the rest of the country. In all likelihood, KiwiBuild will absorb labour resources that would otherwise have been available to build private sector-funded houses. 

“For an industry already running at capacity this is a potential problem, however the current easing of building consents around NZ may help to at least free up some labour force for Auckland’s construction market,” Mr Goodall said.

Net migration in New Zealand is easing downwards but the falls are very gentle and inflows are still at a high level historically.   In the context of skilled labour shortages in New Zealand, Goodall notes: “A key migration statistic we watch for is the balance with Australia: this is currently in NZ’s favour, but it’s historically been the swing factor and when it changes it can drop very quickly”.

The March/April edition of the CoreLogic Property Market & Economic Update Report covers off economic factors influencing the housing market, before addressing sales volumes, values, and active buyer types in both the national and main centre housing markets.

Additional report highlights include: 


  • Mortgage rates: rates have remained low lately with competition amongst the banks strong, but even if the incoming Reserve Bank Governor, Adrian Orr, shakes things up a bit:  given NZ’s continued low inflation environment, OCR increases before 2019 remain unlikely. Early signs of offshore funding pressures may still push up NZ mortgage rates over the next 18 - 24 months, coinciding with when the majority of NZ’s current fixed mortgages will come to an end.
  • Sales volumes: dampening market activity levels mean Auckland properties are now sitting on the market for longer than they have done for several years. Hamilton and Wellington however are experiencing an increase in property turnovers and Dunedin is also showing signs of recovery.  
  • Market Activity: March is expected to be a reasonably good performer (in line with normal seasonal patterns) but valuations activity is generally drifting down, so completed property sales may also remain soft. 
  • Buyer classification: in a generally weak market for volumes, first time buyers have held up better than other groups, perhaps partly due to being able to access KiwiSaver funds for a deposit. They’re also willing to compromise on location and/or quality, which is important in terms of entering the Auckland market in particular
  • Tauranga: not really a first time buyer market as much as other parts of NZ, so it’s been existing owners (movers or multiple property owners) that have kept activity going and values rising
  • Wellington: The Capital city’s market is tight in terms of listings and first time buyers are very active: keeping values rising, currently at an annual rate of about 9%
  • Rentals: Dunedin stands out, with reasonably solid rental growth and reasonable gross yield. Christchurch’s market is the weakest and Wellington/Tauranga’s yields are low compared to their rental growth. 

To download the full report click here.

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