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Property vulnerability revealed in new CoreLogic data

The property analysts CoreLogic NZ say the Auckland property market is the most vulnerable of all urban regions in New Zealand.

Tuesday, October 12th 2021, 12:30PM 1 Comment

by Eric Frykberg

The property analysts CoreLogic NZ say the Auckland property market is the most vulnerable of all urban regions in New Zealand. 

Otorahanga and the Mackenzie district are the most vulnerable rural areas. 

This information could prove important to banks and mortgage brokers as well as homebuyers, as it gives a clue about future risks. 

It has become available because of a decision by CoreLogic to look beyond nationwide statistics and analyse the vulnerability of individual regions. 

The research starts from the standpoint of surging property inflation in the past year, 26.3% according to QV.  

CoreLogic says this has pulled housing affordability down to the lowest level in New Zealand history.

The company's PropertyVulnerability Index looks deeper into this by analysing six categories of data:   housing affordability, credit reporting, investor activity, demand-supply balance, local employment and Trade Me data.

These are combined to give an idea of overall risks from region to region.

CoreLogic's NZ Head of Research Nick Goodall said the index highlighted Otorohanga and MacKenzie as the two most vulnerable Territorial Authorities, while Waimakariri and Timaru appear to be least vulnerable.

Of the six main centres, Auckland is most vulnerable and Christchurch least vulnerable.

“There are a broad range of factors which will influence the future performance of the property market and these will vary in their relevance from region to region,” Goodall said. 

“It’s important to note the areas expected to underperform may not necessarily see values fall; but in relative terms they face the greatest economic risks which makes them more vulnerable to a downturn.”

CoreLogic NZ’s Chief Property Economist Kelvin Davidson said the country’s housing market has been in a significant upswing phase for more than a year.

“Following the 2020 lockdown, confidence rebounded, unemployment fell, mortgage rates were cut, and deposit requirements eased, alongside other official measures which played a role in the strong performance of the housing market,” he said.

“Of course, nothing can go up forever and the already stretched position for housing affordability across NZ has further deteriorated in the past year.”

Tags: CoreLogic house prices

« House prices rise againCCCFA and financial adviser reforms not well implemented; Bankers Association »

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Comments from our readers

On 12 October 2021 at 1:38 pm Amused said:
If this industry has learnt anything over the past 36 months it's that CoreLogic respectfully are the last organisation that banks or mortgage brokers should be listening to when it comes to assessing the current market value of residential properties.

ANZ's much overdue decision earlier this year to stop using CoreLogic E valuations (instead opting now for Valocity i-valuations) when assessing a property as security for a new home loan was a fundamental rejection of CoreLogic’s property data that they collect and hold.

Loan assessors at ANZ have told me that the bank was getting sick and tired of having to ask mortgage brokers and our clients for new registered valuations at purchase time because CoreLogic’s data on a property was out of date and not even close to its current market value that the broker's client was looking to offer at tender or auction. In some instances CoreLogic were out by as much as $200k+ when the poor old client fronted with a valuation prior to making their offer. It was proving embarrassing for ANZ to be told each time by the broker in question "there, I told you the house was worth more!"

I appreciate that gauging the current market value of residential properties across New Zealand must be a challenging exercise at the best of times but based on the biggest lender in the country no longer having confidence in CoreLogic’s property data I would take anything that CoreLogic say about property with a very large grain of salt.

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Lender Flt 1yr 2yr 3yr
AIA 4.55 ▲2.99 ▲3.45 ▲3.69
ANZ 4.59 3.39 3.85 4.09
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.79 3.25 3.49
ASB Back My Build ▲2.04 - - -
ASB Bank 4.45 ▲2.99 ▲3.45 ▲3.69
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▲2.99 ▲3.45 ▲3.69
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.70 ▲3.59 ▲4.05 ▲4.29
BNZ - TotalMoney 4.70 - - -
CFML Loans ▲5.15 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.45 2.85 3.15
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.80 4.00 4.34
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.95 3.15 3.49
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 3.05 3.45 3.75
SBS Bank Special - 2.55 2.95 3.25
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.65 - -
The Co-operative Bank - Owner Occ ▲4.55 2.79 3.25 3.49
The Co-operative Bank - Standard ▲4.55 3.59 4.05 4.29
TSB Bank 5.34 3.35 3.75 4.05
TSB Special 4.54 2.55 2.95 3.25
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.84 3.45 3.85 4.09
Westpac - Offset 4.84 - - -
Westpac Special - 2.85 3.25 3.49
Median 4.57 2.99 3.45 3.49

Last updated: 15 October 2021 8:56am

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