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Mike Robson – Living and Selling Real Estate in Mt Eden / Epsom

Values continue to drop in Auckland & Hamilton, and slow elsewhere


In Auckland, the average value of housing stock reached a new peak of just over $1.05m in November 2016. Since then, the average value of a dwelling has dropped by just under $8k, or 0.7%.

This dip in values is in stark contrast to the rise of $118k or 13.6% in the 9 months before that November peak. It looks very similar to what we saw in early 2016, when a previous round of LVR restrictions saw values in Auckland drop by 0.8% over the course of two months, before then taking off again.

Much of the dip in values can be attributed to the LVR restrictions making it more difficult for people, especially investors, to secure mortgages. The big banks have also tightened up their lending criteria.

Against all this we’ve got strong net migration, high consumer confidence, mortgage interest rates at historic lows, plus a persistent housing shortage in Auckland. It’s hard to see how values can drop much further. Our call is that it’s likely that values will begin to rise again in a few months, just like they did in response to the previous round of restrictions. This time though – the rate of increase will likely be much less.