Although property sales volumes across Auckland as a whole have been low in recent years, some suburbs have been faster moving – these are mostly development areas (e.g. Hobsonville, Silverdale), and while the extra supply is raising turnover rates, it’s also dampening prices. Other parts of Auckland (e.g. Parnell, Orakei) have been much quieter, or in other words slow-movers. Generally, slow-moving areas have subdued price growth, but outside Auckland, Ngongotaha (Rotorua) and Wairoa break that rule of thumb.
CoreLogic Senior Property Economist Kelvin Davidson writes:
An article that featured as part of last week’s Property Week on Oneroof covered the latest CoreLogic data on fast- and slow-moving suburbs across the country, highlighting areas that have had very short (and long) median selling periods over the past year: https://www.oneroof.co.nz/news/revealed-the-suburbs-where-homes-are-selling-the-fastest-36671
An additional measure that we regularly look at to judge the strength or weakness of a particular area is the turnover rate – i.e. total sales over the past year as a % of the total number of houses. So what’s this measure currently showing us*? Focusing in on the top 20 suburbs for turnover rate – i.e. the fast movers – four of the top five are in Auckland (see the first chart), with the other one being Pokeno (Waikato District). This is no surprise – given that these areas are seeing a lot of new development, you’d expect strong turnover rates as the new-builds are sold off.
Similarly, there aren’t any real surprises amongst the rest of the top 20 either. For example, suburbs in Taupo, Tararua, Dunedin, and Invercargill all feature, and these are parts of the country that have been more buoyant in terms of demand and market activity lately, and especially for prices. Indeed, Pahiatua (Tararua), Strathern (Invercargill), South Dunedin, Mangakino (Taupo), and Georgetown (Inver.) have all seen double-digit growth in property values over the past year – see the second chart.
The second chart also highlights how a fast moving suburb doesn’t always have strong price growth. True, that does tend to be the rule of thumb. But in development areas in Kumeu, Hobsonville, Pokeno, Whenuapai, and Silverdale, the extra supply (which is boosting turnover rates) is actually weighing on property values.
Turning to the other end of the spectrum, Auckland features again, but this time for slow-moving suburbs. Sixteen of the 20 slowest moving suburbs over the past year are in Auckland, and include some of the pricier areas of the city, such as Parnell and Orakei (see the third chart). Given plenty of listings and choice for buyers, as well as affordability problems across many parts of Auckland, it stands to reason that sales activity and turnover rates have generally been low. Elsewhere, a couple of Rotorua suburbs have also been quiet, alongside Bromley (Christchurch) and Wairoa.
However, just as a high turnover rate doesn’t necessarily mean strong price rises (e.g. Hobsonville, Silverdale), a low turnover rate is not always consistent with weak price growth. As the fourth chart shows, Ngongotaha (Rotorua) and Wairoa have had relatively low sales activity over the past year, but solid gains in median property values, especially in Wairoa (17.8%). In these cases, the lack of sales is reflecting restricted listings volumes and limited choice for buyers – in that environment, it’s not surprising that values are growing strongly.
* All suburbs shown here have at least 500 properties and at least 20 sales over the past year.