Vendors appear to be buckling in quite a few parts of Auckland
It’s a stylised fact that during property market upswings, the growth in values tends to be fairly synchronised and widespread. Certainly, if you drill down to median property values at a suburb level ‘all boats were floated’ across NZ over 2020-21 by the rising tide of favourable interest rates and mortgage finance that was relatively easy to secure (e.g. due to the temporary removal of the loan to value ratio rules).
However, that upswing has pretty quickly given way to an abrupt slowdown phase, as higher mortgage rates bite harder (as borrowers on fixed rates roll onto new terms) and as the full effects of lending rule changes at the end of 2021 take hold. In particular, if you keep in mind that the LVR rules were tightened for owner-occupiers on 1st November and that the CCCFA changes kicked in on 1st December, it’s striking that within that 3-4 month period we’ve really seen a quick halt to property value growth.
To be fair, some areas/property types are still seeing continued growth, as demand remains strong – there’s a suggestion that ‘solid, family homes’ are in that category. But elsewhere, there’s either a standoff between buyers and sellers with a price hard to settle on (and properties are sitting unsold for longer), or there are clear signs that vendors have become more pessimistic and are now willing to accept lower prices.
Many parts of Auckland are included in this group where median property values have actually fallen outright over the past three months – see the map below (with the number of properties in each suburb represented by the size of the circle, and the recent change in values represented by the colour...
