Big regional differences in house price movements in June

Property

Topsy-turvy Hawke's Bay housing market with Napier recording the biggest house price growth in June and Hastings the biggest decline

14th Jul 21, 9:53am by Greg Ninness

The Real Estate Institute of New Zealand's House Price Index (HPI) shows significant regional differences in house price movements in June.

Unlike median or average selling prices, the HPI adjusts for differences in the mix of properties sold each month, to give a better overall indication of price movements.

Across the whole of New Zealand, the HPI was up just 0.9% in the month of June, suggesting a substantial slowdown in the rate at which prices have been rising, with the HPI up 29.8% over the year to June.

However price growth was much weaker in Auckland than it was in most of the rest of the country.

In the Auckland region the HPI increased by just 0.3% in June compared to 1.3% for the rest of the country excluding Auckland.

Within the Auckland region, price movements in June ranged from a 0.8% decline in the central suburbs, to an increase of 2.9% in Rodney.

The Wellington region also posted very mixed results in June, with an overall increase of 1.8%. While still strong this suggests price rises have slowed significantly from the scorching annual rate of 42.8%.

Within the Wellington region, the HPI was up strongly in Wellington City at 3.7% in June, increased more modestly in Upper Hutt at 0.9%, but declined in Porirua -1.3% and was unchanged in Lower Hutt.

The biggest increase in June was Napier at 5.1%, followed by Tauranga at 4.1% while the biggest decline was in Porirua at -1.3% followed by Hastings -1.2%.

The table below shows the HPI movements in all major urban districts.

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REINZ House Price Index June 2021

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26 Comments

by General Comment | 14th Jul 21, 10:13am 1626214382

I've noticed a lot of lower-priced properties in the area (Hastings) on the market lately. I have a property up for rent at the moment and I'm getting a surprising number of enquiries from people working in Napier because their current rental is being sold. I suspect higher-leveraged specuvestors are battening down and bailing from what they consider are their higher risk properties.

by EarlyRiser | 14th Jul 21, 12:16pm 1626221792

I follow the market here in Napier and this 5.1% monthly increase was a bit of a surprise. I thought things seemed to be "steady" although that is likely influenced by me observing mainly my and neighbouring suburbs and not the entire Napier market. Properties are still selling but my observation is that they are not moving nearly as fast as they were.

by tothepoint | 14th Jul 21, 1:11pm 1626225098

The House Price Index increase for Palmerston North City for 1 year is given as 61.2 per cent in the article's table.

This does seem rather a large increase.

TTP

by Brock Landers | 14th Jul 21, 10:19am 1626214762

Sounds like nobody really knows what anything is worth anymore. Everything is manipulated. The real estate industry is corrupt beyond imagination.

by Carlos67 | 14th Jul 21, 11:04am 1626217463

Sure just like my local Porsche dealer, prices are way to high and more than what I want to spend so they must be corrupt. The price is "Worth" what someone else is prepared to pay for it. Some stupid Mario Brothers game that was new and sealed in the box just got over $1 Million at Auction the other day, makes your house in NZ look like a bargain, its all relative.

by Brock Landers | 14th Jul 21, 11:14am 1626218081

Sorry to ruin your little story, but the corruption was a reference to dishonest and manipulative agent and agency practices, not the extortionate prices.

by lowercase capitalist | 14th Jul 21, 12:14pm 1626221645

Slight difference there in that not everyone needs a Porsche.

If you can't buy a Porsche at least you can take the bus. If you cant afford rent then hopefully its not too cold out...

by Pat.T | 14th Jul 21, 12:32pm 1626222748

It must always be remembered that the buyer sets the price, not the real estate industry.
If no buyers are willing to pay a set price on a property then the price will drop.

by tothepoint | 14th Jul 21, 1:29pm 1626226198

Hi Brock,

No need to become too disaffected.......

The market can always be relied upon to determine values.

TTP

by Takere | 15th Jul 21, 9:28am 1626298137

It's the ole religion of (manipulated) market forces and the belief in endless growth is forever ... until it's not.

by Flying high | 14th Jul 21, 10:51am 1626216663

4 and 5 percent increases for tauranga and napier are mostly catchup from a quiet previous 2 months. They could just as easily peg back next month

by Carlos67 | 14th Jul 21, 10:57am 1626217055

The gains in Tauranga have been unreal, still it was always going to be on the cards as its better than Auckland and people cannot wait to sell up and come here with money left in the bank in the process. Still has a way to go before its back to 4 and 5 percent increase PER YEAR that is was near pre-Covid.

by MLSmith1 | 14th Jul 21, 11:13am 1626218019

Issue is finding work here in Tauranga... that's if you need/want to

by Brock Landers | 14th Jul 21, 11:16am 1626218204

It's just boomers moving down as they reach retirement and that sweet sweet welfare. If you still have all your teeth it's best to steer well clear of the place.

by printer8 | 14th Jul 21, 7:39pm 1626248364

Brock
Come on, be positive just for once . . . boomers vacating houses in Auckland increasing availability for FHB.

by J.C. | 14th Jul 21, 11:27am 1626218870

Anyone know the methodology of the HPI that they can explain in an elevator pitch? Is it just a price aggregate on
any number of sales or is the volume of sales normalized in any way? Is it a hedonic index?

by sadr001 | 14th Jul 21, 12:32pm 1626222755

0.9% per month is still 11% per year! Did he just call that a substantial slowdown?

by J.C. | 14th Jul 21, 1:10pm 1626225045

No it's not. 0.9% is 0.9% of an index. And I can guarantee you that most people have no idea how the index is constructed nor do they know its 'margin of error' in relation to actual market prices going at a point in time.

by Nzdan | 14th Jul 21, 1:13pm 1626225183

Slowing from 200km/h to 70km/h is a substantial slowdown.

by Flying high | 14th Jul 21, 2:10pm 1626228609

It is not appropriate to drive 70k past houses

by Pragmatist | 14th Jul 21, 6:42pm 1626244979

Why have you got $70k in the boot? Drug dealer?

by Rick.James | 14th Jul 21, 1:00pm 1626224436

Consider changing your denominator to Bitcoin.

i.e. house prices got crushed in the last year and the last decade, and likely the next decade.

Short term volatility of course.

by J.C. | 14th Jul 21, 1:12pm 1626225123

The majority of NZers do not price houses in BTC because they buy / sell houses in NZD.

by Pragmatist | 14th Jul 21, 6:42pm 1626244943

Imagine the screams at the changes in mortgage repayments if your payment is a fixed number of bitcoin per month but you earn real world money.. ie NZD.

by CWBW | 14th Jul 21, 1:45pm 1626227118

I think the direction is clear.

Be quick.

by Black and White | 14th Jul 21, 3:54pm 1626234872

Let's keep taking this down and get all Hard working Kiwis into there own home.
The time has come to take control.
Let's hope the red team make this happen.