Property values set to rise across some suburbs - OneRoof report - 1News

Property values are set to go up in 107 suburbs across the country, according to new data from OneRoof.

The latest figures from the OneRoof-Valocity House Value index has revealed the top suburbs with "the potential to lead the housing market rebound".

The data found that 107 suburbs in Auckland, Christchurch, Dunedin and Wellington are "in a prime position" to see growth over the next six months.

They found the strongest suburbs for growth are in Christchurch and Dunedin — performing best over the last three months in terms of average property prices.

These suburbs are Bromley in Christchurch, which is up 3% to $515,000, Aranui in Christchurc,h which is up 2.6% to $466,000 and Waikouaiti in Dunedin, up 2.1% to $527,000.

OneRoof said 17 suburbs within the group of 107 saw a growth of more than 1%.

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OneRoof editor Owen Vaughan believes most of that growth will come from first-home buyers.

"Most of the metro growth suburbs had an average property value of less than $1 million, a strong indication that first-home buyers will be driving much of the revival, although the rebound in prices in several wealthy suburbs suggests the top end of the housing market is in the mood to buy again," Vaughan said.

Data also showed 69 suburbs' decline in value had slowed over the last six months, with Auckland and Wellington seeing the biggest turnarounds.

OneRoof believes Grey Lynn, Ponsonby and Remuera, in Auckland, and Fendalton and Merivale, in Christchurch, are "primed for record growth".

"Affordable suburbs in Auckland’s south are also on the rebound list, including Mangere East, Manurewa and Wiri," Vaughan said.

"However, suburbs in Hamilton, Queenstown-Lakes and Tauranga remain under pressure, with the research finding no strong evidence of an immediate revival in their prices."

The average house price changes. (Source: Supplied)

A number of regional suburbs outside the country’s major metro areas are also set to see a reprieve.

These areas are in the South Island, Taranaki and Northland, which recorded a growth in value over the last three months.

Woodville, Eketahuna, Pahiatua and Dannevirke all experienced around 10% growth, likely attributed to their property value being less than $500,000.

"There are 23 suburbs that are up year-on-year, including Reefton and Westport, on the West Coast. The one standout higher value suburb was Russell, in Northland, which has an average property value of $1.614 million," Vaughan said.

While some suburbs have seen big changes to property value, OneRoof said there were minimal changes to the overall market.

The national average property value is down 2.1% in the last three months and down 11.1% year on year — sitting around $944,000.

"Continued drops in new listings volumes, at a time when the market was bottoming out, should be a concern for buyers who held off purchase decisions in the hope of further price drops," Vaughn said.

Listings were up 6.5% year-on-year across the country, but new listings were down almost 10% over the same period.

"New listings are down year-on-year in all but four regions, with the biggest shortages in cyclone-hit Gisborne and Hawke's Bay, down 62% and 24%, respectively," OneRoof said.

"New listings are down 21% year-on-year in Wellington and 17% in Auckland.

"We are increasingly hearing from agents that have the buyers, but the stock just isn't there. Auctions are also starting to become more competitive. Tightness in listing volumes will tilt the market in favour of sellers in many locations."

OCR to provide certainty to market

Valocity senior researcher Wayne Shum said the cash rate peaking at 5.5% would provide "certainty" to the housing market.

"The slip into recession would suggest the Reserve Bank's action to bring down inflation has worked, although we won't know for sure how successful the aggressive lifts in rates have been until the latest CPI figures come out later this month," he said.

Shum said that a rise in net migration and expected pressure on rents would support the revival — but said the market isn't out of the woods yet.

"There is still mortgage pain to come for existing borrowers — at the end of the first quarter of this year, the effective interest rate was 4.7%, and with it now sitting around the 6% mark, further rises are forecast by the fourth quarter.

"Homeowners are unlikely to be making additional purchases and instead may focus on paying down debt. Mortgage arrears rose over the past quarter. However, they remain below the months immediately post-Covid lockdown and the aftermath of the GFC," Shum said.

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