The rise of Waikato & Bay of Plenty
New Zealand’s housing market is undergoing a shift in its centre of gravity from Auckland out to the Waikato / Bay of Plenty region, it has been suggested.
Tuesday, October 13th 2015, 12:00AM
by The Landlord
Westpac has just released its latest Home Truths report which states this month’s data shows the market remains strong but that the price boom is shifting.
The bank’s chief economist, Dominick Stephens, said the regional pattern of turnover was consistent with the shift in market heat that Westpac identified two months ago.
“Turnover was down in Auckland and Canterbury, but up very strongly in Waikato / Bay of Plenty.”
Stephens said there was now a range of information which shows a shift in the market towards Hamilton and Tauranga.
For example, QV’s latest data shows that Hamilton can now boast the fastest rising prices in the country.
It had a 9.0% gain in values over the three months to September as compared to Auckland’s 6.7%.
Yesterday’s REINZ data, which shows particularly strong sales and price growth in Waikato / Bay of Plenty and Northland, adds further weight to Stephens’ view.
Stephens said the combination of falling interest rates, the slowing economy, and changing tax and mortgage rules have played out differently in different regions.
Westpac expects the Auckland market to slow, due to tighter lending rules, but there has been no slowdown in the SuperCity’s prices as yet.
“We still feel on track with this prediction – the straws of a modest slowdown are in the wind, and we are yet to see how the market responds to the tax changes and lending restrictions.”
The outlook for housing markets in dairy dominated regions has improved, although Hamilton’s market has remained strong despite recent dairy woes, Stephens said.
Meanwhile, Tauranga’s prices continue to rise and Christchurch’s prices continue to slip backwards as more housing supply comes on to market.
Thanks to lower interest rates and more lenient lending restrictions, there has been a pickup in market turnover for the likes of Dunedin, Nelson and Wellington.
Stephens said Westpac recently forecast nationwide house price inflation at 10% for 2015 and 4.5% for 2016.
“Putting all of the above together, it looks as though we may have to lift those forecasts a little.”
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