Increased supply of housing into Auckland has meant its house price growth has stalled over the past 10 years compared to the rest of the country, Cotality says.
It has released new research that shows the 10-year growth rate of prices around the country, as well as how far they are from their post-Covid peaks.
Mackenzie District had the highest fastest growth, up 125 percent over 10 years and now back to its peak price.
But the Auckland districts were at the bottom of the table.
Waitakere was up just 9 percent over 10 years and was 26 percent below the peak.
Central Auckland prices were up 10 percent over 10 years and still 27 percent below the peak.
North Shore was up 10 percent over 10 years, too, and still 21 percent below the peak.
Susan Edmunds on Auckland’s housing supply and prices
Parts of Wellington were similarly off their 2022 highs but had experienced faster growth over 10 years.
Lower Hutt, for example, was up 50 percent over 10 years but down 29 percent from the peak.
“When you look at how supply has changed in Auckland relative to the population over the past seven, eight, nine years, it’s been striking that housing supply has adjusted and lo and behold there’s been some pretty subdued house price growth,” Cotality chief property economist Kelvin Davidson said.
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“Aside from the migration spike in 2023, housing stock growth has consistently outpaced Auckland’s population since 2018 which was also when the unitary plan was enacted. In that light, it’s no surprise to see that Auckland is at the bottom of the list in terms of value growth over the past 10 years.”
Simplicity chief economist Shamubeel Eaqub said that was probably part of it, but Auckland had also been through a deeper recession than many other parts of the country, and net migration had dropped. Auckland was usually more affected by population growth from migration than other parts of the country.
Davidson said it might be sensible for New Zealanders to reframe the discussion away from how far from the peak prices still were.
For the people responsible for roughly 80,000 transactions that happened at that peak time, the drop since then would be important. But for the owners of the remaining 95 percent of housing stock, prices might still be higher than when they purchased.
Davidson said the national median property measure by Cotality’s figures was 19 percent below the peak but 37 percent higher than 10 years ago.
Within that, 12 areas had values double since 2016, an annual average of 7 percent growth, or more.
“Whanganui and Gisborne, as examples, have both seen large falls from the peak yet have still shown those significant longer – term gains. By contrast, markets such as Ashburton and Christchurch are within 1 percent of their previous peak, yet they haven’t risen nearly as much over the past 10 years – 48 percent and 58 percent.
“That is to say, focusing mostly on the change from the peak means losing the longer – term context in many cases. Meanwhile, even for buyers at the peak, it’s also worth noting that if they’re still servicing the debt, there’s also less to be concerned about. Indeed, low mortgage arrears and mortgagee sales volumes show that the vast majority of people are faring well on this front.”
He said he thought house price growth would be slower in future.
“Both major parties have committed to reform around land planning and resource management … it feels as if supply might not be such a concern in future. Once people start to believe that housing supply will always be more responsive, they probably pare back their expectations for house price growth, too.”
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