As it turns out, up isn't the only way that the Auckland property mark can go. Rupert Gough explores what is going on in the recent drop in Auckland sales prices.
Recent numbers from the QV House Price Index have shown that Auckland values have dropped for the second month in a row, meaning that, the average value of a house is down by 0.8% since December 2015.
While 0.8% is hardly game-changing, this represents a large drop off in the gains that were previously experienced by Auckland property owners.
Interestingly enough, the surrounding areas of Auckland haven’t experienced such a dramatic trail off, in fact they're still growing. Whangarei and Kaipara have risen 5 per cent in the last quarter.
To me, this Auckland slowdown is a result of an income issue, where the slightly cheaper fringe suburbs and other districts have still got strong buying activity. This is more obvious in smaller towns such as Wellington and further south.
It’s difficult to say where prices will go from here, however, compared to Central and West Auckland, other cities are looking far cheaper at the moment, so I expect buyers to look at those cities.
For a very good index look at Auckland property prices, we suggest reading this QV article: https://www.qv.co.nz/resources/news/article?blogId=222
Rupert Gough is an Authorised Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.