14 Mar 2023

Houses in wealthy suburbs drop estimated $300k in value

9:27 am on 14 March 2023

Photo: RNZ / Nathan Mckinnon

Homeowners in some of the wealthiest suburbs in the country have seen their home values drop an estimated $300,000 or more over the past year.

Property research company CoreLogic's quarterly market mapping tool shows more than a third of the 923 suburbs monitored across the country saw double-digit declines over the last year.

Ten of the suburbs surveyed recorded a fall in value of $300,000 or more, and most could be classed as 'top-end' suburbs, including Saint Marys Bay, Westmere and Orakei in Auckland, and Seatoun and Karaka Bays in Wellington.

Values fell by 20 percent or more in 31 suburbs - just one of those was outside the wider Wellington region.

Chief property economist Kelvin Davidson said homeowners who saw the largest decline in their median house prices would likely only be affected if they were trying to sell now, after buying at the market's peak.

"It's also worth noting that houses in those suburbs are generally more expensive to start with, so the percentage fall is always going to translate into a bigger drop in dollar value," he said.

"In addition, it's not just the upper end of the market that has seen a downturn.

"Overall, this confirms that this downturn has been pretty deep and broad-based across many parts of the country - to the detriment of existing property owners, but a sign of hope for aspiring buyers who have their finances approved."

Auckland property values dropped in all 197 suburbs analysed over the past 12 months - the smallest drop was in Waiuku, at 0.3 percent or $2800, while falls of 16 percent or more were seen in Waiatarua, Otara, Wattle Downs and Clover Park.

In Wellington values dropped nearly 28 percent in Plimmerton, and 25 percent in Southgate, which remains the most expensive suburb despite recording the largest drop in prices of $389,800.

Christchurch fared better however, with values falling 9 percent in Ilam, Spreydon and Sockburn and rising 8.4 percent in Aranui in the east.

Values fell across Dunedin in the past year, with falls ranging from 3 percent in Karitane to 16 percent in Saint Leonards, Maryhill, Ravensbourne, and Forbury.

Market forecast

Davidson said there were still significant challenges in the property market, such as high mortgage rates for new borrowers and expensive repricing for existing borrowers.

"But many areas have already fallen significantly, and therefore could be poised to bottom out first as underlying drivers settle down," he said.

"Overall, even if sales activity and property values bottom out this year as is expected, the property market may well remain subdued into 2024.

"But those 'early fallers', or suburbs where values dropped first, could then rise sooner too."

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