Expert industry study of the Auckland housing market numbers in early May has led to pundits concluding a decrease in buyer interest. The Auckland housing market performed magnificently in the first 6 months of the calendar year. But, an 11% decrease in buyer demands for property valuations has been noted in early May, compared to the past 6 months. Reports from a prominent realty market indices and analytics firm also suggest a marked reduction in the number of buyers applying for property mortgages.

The waning of buyer interest gives the Reserve Bank of NZ the time it requires to evaluate whether interest-only loans should be limited; or, whether there needs to be a cap on high debt-to-income lending limit interest-only loans; or; even consider a limit on high debt-to-income lending.

However, given the Auckland house prices in 2021, April witnessed steady demand in new property listings. The month still depicted decent sales numbers in the Auckland market as well as other prime real estate markets of NZ, backed by buyer interest.

April Performance Report for NZ’s Biggest Housing Markets

Auckland

In April, the Auckland median house price rose by a decent 2.4% in April compared to the extravagant 15.6% depicted in the previous 12 months. While brokers and property sellers rued the sharp drop from 2019-20 Q3’s 29%, the slow and less-intimidating 2.4% rise encouraged more buyers and investors.

The slow growth catalyzed property affordability, considering that the price rise was a lumpsum 24% in the Auckland house prices in 2021 YTD. As property became more affordable, more homebuyers closed in on deals, in April, on property that would be way over budget for them, otherwise.

Wellington

Wellington was not far behind Auckland as its property market demonstrated a quarterly growth rate that reached above 10.4% by the end of April. The median house price in central Wellington reached $1.1m with a growth rate of 21.3%, and in Masterton, $579k with a growth rate of 35%. The average house price in Kapiti Coast District maintained par with the other locations and demonstrated exceptional growth, ending April at a hike of 32.7%. Even Upper Hutt exhibited an increase of 29.9%, which equals $188,000.

Wellington property princes gave the Auckland house prices in 2021 a steep competition. Akin to the Auckland housing market, first-time buyers recovered from Fear Of Missing Out and avoided the inflated prices with prudence. However, those with an investor’s keen sense and the buying capacity did not shy away after taking the slowed growth rate of prices into account.

Christchurch

The Christchurch property market was not lagging far behind. Growth in house prices inched above 6.9% by the end of April, bringing the annual growth rate to a whopping 15.1%. By Christchurch standards, the market has demonstrated growth by $79k from the previous year; standing now at a respectable $594k median housing price.

Hamilton

Quarterly growth rates in Hamilton climbed 9.4%, taking the annual growth rate to 20.5%. Estimations suggest that this equals a hike of nearly $130k. Mortgaged investors alone account for 39% of the sales here this year.

Dunedin

Dunedin demonstrated a growth of 2.4% in April, which accounts for an $83k hike, even though the annual growth rate dipped. The median house price here has doubled in the last five years; mortgage investors now represent 31% of the purchases here in 2021.

Tauranga

Median housing prices in Tauranga have also climbed above the $900k price bracket for the first time this April. This amounts to a 19% hike from the previous year, equalling a jump of $147k approx.

Inferences from the April property market

The general opinion indicates that the recent Loan-to-value ratio changes implemented by the Government are the primary causes behind this change in buyer behavior. However, the overall market summary suggests no sign of property owners exiting the market.  The number of weekly, new listings fell below the average only around ANZAC Day. Thus, buyer competition is still very active in the Auckland housing market.

It is quite noteworthy that there has been a steady addition of new property units for sale across the major property markets in NZ, including Auckland. A healthy slew of about 3000 properties joined the market until ANZAC weekend. Hence, even as the reports suggest a cooling-off period on the horizon, the Auckland housing market news in itself is a trustable indicator of slow but steady property market growth.