MONTHLY PROPERTY MARKET & ECONOMIC UPDATE - CORELOGIC

MONTHLY PROPERTY MARKET & ECONOMIC UPDATE - CORELOGIC
Monthly Property Market
& Economic Update
New Zealand
February 2018
MONTHLY PROPERTY MARKET & ECONOMIC UPDATE - CORELOGIC
Contents
About CoreLogic                                                                                                                                                                                                                      4
       CoreLogic Data and Analytics ..................................................................................................................................................................                               4
       Legal Disclaimer .............................................................................................................................................................................................                4

Macro Economic and Demographic Indicators                                                                                                                                                                                            6
       New Zealand Asset Classes .......................................................................................................................................................................                             7
       New Zealand Population .............................................................................................................................................................................                          8
       Migration ...........................................................................................................................................................................................................         9
       Regional Building Consents .......................................................................................................................................................................                           10
       Population Growth Compared to Building Consents ......................................................................................................................                                                       10
       Consumer Confidence .................................................................................................................................................................................                         11
       Employment ....................................................................................................................................................................................................              12
       Interest Rates ..................................................................................................................................................................................................            13

Housing Overview                                                                                                                                                                                                                    14
       Nationwide Values .........................................................................................................................................................................................                  15
       Sales Volumes .................................................................................................................................................................................................              16
       Rent .....................................................................................................................................................................................................................   17
       Market Activity ...............................................................................................................................................................................................              18
       Valuations Completed...................................................................................................................................................................................                      19
       Listings ...............................................................................................................................................................................................................     20
       Buyer Classification .......................................................................................................................................................................................                 22
       House Price Index ..........................................................................................................................................................................................                 23

Main Cities Housing Market Indicators                                                                                                                                                                                               26
       Auckland Market Activity ...........................................................................................................................................................................                         28
       Auckland Values .............................................................................................................................................................................................                29
       Auckland Suburb Value Change ..............................................................................................................................................................                                  30
       Current Auckland Suburb Values ............................................................................................................................................................                                  32
       Hamilton Market Activity ............................................................................................................................................................................                        34
       Hamilton Values ..............................................................................................................................................................................................               35
       Tauranga Market Activity ............................................................................................................................................................................                        36
       Tauranga Values .............................................................................................................................................................................................                37
       Wellington Market Activity .........................................................................................................................................................................                         38
       Wellington Values ..........................................................................................................................................................................................                 39
       Christchurch Market Activity .....................................................................................................................................................................                           40
       Christchurch Values ......................................................................................................................................................................................                   41
       Dunedin Market Activity ..............................................................................................................................................................................                       42
       Dunedin Values ...............................................................................................................................................................................................               43




                                                                                       CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 2

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MONTHLY PROPERTY MARKET & ECONOMIC UPDATE - CORELOGIC
About CoreLogic




CoreLogic is a leading property information,                                                               Whilst all reasonable effort is made to ensure
analytics and services provider in the                                                                     the information in this publication is current,
United States, Australia and New Zealand.                                                                  CoreLogic does not warrant the accuracy,
CoreLogic helps clients identify and manage                                                                currency or completeness of the data and
growth opportunities, improve performance                                                                  commentary contained in this publication
and mitigate risk, by providing clients with                                                               and to the full extent not prohibited by
innovative, technology-based services and                                                                  law excludes all loss or damage arising in
access to rich data and analytics.                                                                         connection with the data and commentary
                                                                                                           contained in this publication.




Contact
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Wellington office                                                                                          Auckland office
Level 2, 275 Cuba Street                                                                                   Level 5
PO Box 4072                                                                                                41 Shortland Street
Wellington 6140                                                                                            Auckland 1010

Email: reports@corelogic.co.nz




www.corelogic.co.nz


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MONTHLY PROPERTY MARKET & ECONOMIC UPDATE - CORELOGIC
CoreLogic Data and Analytics
CoreLogic Buyer Classification                                                                             Suburb scorecard
A unique and flagship product to CoreLogic, Buyer                                                          Detailed housing market indicators at suburb level,
Classification determines the type of buyer for every                                                      with data either in time series or current snapshot, and
purchase of property based on their current and previous                                                   segmented across houses, flats and apartments. The
ownership of NZ property. Created at a record level, this                                                  Suburb Scorecard data includes key housing market
can be matched to other datasets or summarised at any                                                      metrics such as median prices, median values, transaction
geographic area.                                                                                           volumes, rental statistics and market metrics such as
                                                                                                           median selling time.
Our buyer classification is used by financial institutions
and Government agencies at both record and summary
level and overlaid with their own data to assist strategic,                                                To view the latest report online and subscribe to
policy, compliance, risk management and marketing                                                          receive it in your inbox on a monthly basis, visit;
decisions.
                                                                                                           www.corelogic.co.nz/new-zealand-monthly-
                                                                                                           property-market-update
CoreLogic value measures
CoreLogic has a suite of products to measure property
prices. This ranges from simple market measurements                                                        If you would like to know more or obtain tailored
such as median or average sales prices through to                                                          data, analytics and insights for your business, please
stratified medians, various house price indices, and valuing                                               email us at reports@corelogic.co.nz.
groups of properties using Automated Valuation Models
such as E-valuer. The house price indices are available both
quarterly for completeness and monthly for reactivity.

The Quarterly CoreLogic House Price Index has been
specifically designed to track the value of a portfolio of
properties over time and is relied upon by New Zealand
regulators and industry as the most accurate measurement
of housing market performance. These value measures are
available for long time series and for either standard or
custom geographic areas and property types.




Legal Disclaimer
Copyright                                                                                                  Data & Research publications
This publication reproduces materials and content owned                                                    Whilst all reasonable effort is made to ensure the
or licenced by RP Data Pty Ltd trading as CoreLogic                                                        information in this publication is current, CoreLogic does
Asia Pacific (CoreLogic) and may include data, statistics,                                                 not warrant the accuracy, currency or completeness of
estimates, indices, photographs, maps, tools, calculators                                                  the Data and commentary contained in this publication
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information (CoreLogic Data).                                                                              loss or damage arising in connection with the Data and
                                                                                                           commentary contained in this publication.
© Copyright 2018. CoreLogic and its licensors are the
sole and exclusive owners of all rights, title and interest                                                You acknowledge and agree that CoreLogic does not
(including intellectual property rights) the CoreLogic Data                                                provide any investment, legal, financial or taxation
contained in this publication. All rights reserved.                                                        advice as to the suitability of any property and this
                                                                                                           publication should not be relied upon in lieu of appropriate
                                                                                                           professional advice.




 Published date: February 2018




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MONTHLY PROPERTY MARKET & ECONOMIC UPDATE - CORELOGIC
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                                                                                                                                                                                       All rights reserved.
MONTHLY PROPERTY MARKET & ECONOMIC UPDATE - CORELOGIC
Macro Economic and
Demographic Indicators




                                                                          CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 6

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MONTHLY PROPERTY MARKET & ECONOMIC UPDATE - CORELOGIC
New Zealand Asset Classes

                                             Residential Real Estate

                                             $1.07          trillion
                                             ($247 billion in home loans)




                                             Commercial/Industrial Real Estate

                                             $201 billion

                                             NZ Listed Stocks

                                             $125 billion

                                             NZ Super and KiwiSaver

                                             $79 billion

The value of residential property continues to grow beyond one trillion dollars, outperforming the
value of other asset classes. Residential mortgages secured against 23% of this value.

Over the last month stocks worldwide experienced somewhat of a market correction with the NZX
dropping 3.6% from its early-January high but they have stabilised in mid-February.




                                                 *Source: CoreLogic NZ, Reserve Bank of NZ, NZX, NZ Superfund, Financial Markets Authority




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MONTHLY PROPERTY MARKET & ECONOMIC UPDATE - CORELOGIC
New Zealand Population
Quarterly Change in National Population

                                                                                                                                     Population growth slowed further in Q4
                                                                                                                                     2017, with the moving average continuing
                                                                                                                                     to trend down.

                                                                                                                                     Almost three-quarters of population
                                                                                                                                     growth is due to net migration, which
                                                                                                                                     was 70,000 for the year to the end of
                                                                                                                                     December 2017. This represents a further
                                                                                                                                     fall from the peak of 72,200 to the end of
                                                                                                                                     June 2017.

                                                                                                                                     After hitting a 20 year low, natural
                                                                                                                                     population growth rebounded in Q4 2017,
                                                                                                                                     but the overall trend is flat.

Population Change Composition




Annual Change in Population




                                                                                                                                                          Source: Statistics New Zealand

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MONTHLY PROPERTY MARKET & ECONOMIC UPDATE - CORELOGIC
Migration
Long Term Migration

                                                                                                                                      The trend of net migration effectively
                                                                                                                                      plateaued for the last three months of
                                                                                                                                      2017 as both arrivals and departures held
                                                                                                                                      firm.

                                                                                                                                      Immigration continues to be a hot topic
                                                                                                                                      for the Government and the declining
                                                                                                                                      trend in net migration is likely to continue.
                                                                                                                                      This may not be as dramatic as previously
                                                                                                                                      expected, due to the need of skilled labour
                                                                                                                                      in an already tight market.

                                                                                                                                      After a few months of net loss to Australia,
                                                                                                                                      the stats veered back into the positives in
                                                                                                                                      the final months of the year. The expected
                                                                                                                                      strength in the Australian economy is
                                                                                                                                      yet to have a significant impact on Kiwi
                                                                                                                                      migrants yet, and while proposed changes
Monthly Net Migration Between New Zealand and Australia                                                                               to remove the subsidised tertiary fees for
                                                                                                                                      New Zealanders have now been scrapped,
                                                                                                                                      there are still some concerns about the
                                                                                                                                      visa status of New Zealanders in Australia
                                                                                                                                      restricting them from access to certain
                                                                                                                                      Government schemes.

                                                                                                                                      In 2017, Dunedin saw a 23.7% increase
                                                                                                                                      in net migration (from 2016): the largest
                                                                                                                                      increase of all our main centres. Net
                                                                                                                                      migration to Christchurch continues to
                                                                                                                                      slowly decrease, after peaking in the year
                                                                                                                                      to the end of March 2016.




                                                                                       Net Gain Last Year                                                          % Change
 TOTAL ALL AREAS                                                                                 70,016                                                                -0.8%
 Auckland Region                                                                                  36,152                                                                6.6%
 Hamilton City                                                                                     1,875                                                               12.3%
 Tauranga City                                                                                     1,052                                                                0.5%
 Wellington                                                                                       3,593                                                                10.9%
 Christchurch City                                                                                5,403                                                                -4.0%
 Dunedin City                                                                                      1,024                                                               23.7%
 Main Urban Area (Other)                                                                          5,239                                                                -5.9%
 Rural Centres                                                                                    4,798                                                                 8.6%
 Not applicable/Not stated                                                                       10,880                                                               -23.8%




                                                                                                                                                           Source: Statistics New Zealand

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MONTHLY PROPERTY MARKET & ECONOMIC UPDATE - CORELOGIC
Regional Building Consents
New Dwelling Consents Trend

                                                                                                                                     Building consents issued in Auckland
                                                                                                                                     continues a strong upwards trend but
                                                                                                                                     there are consistent reports of the
                                                                                                                                     construction industry being very close to
                                                                                                                                     capacity.

                                                                                                                                     A recent Government commissioned
                                                                                                                                     ‘Stocktake’ report detailed three key
                                                                                                                                     barriers to housing supply: planning,
                                                                                                                                     infrastructure and the development sector.
                                                                                                                                     This foreshadows the Government’s
                                                                                                                                     challenge in implementing KiwiBuild: the
                                                                                                                                     commitment to delivering 100,000 quality
                                                                                                                                     affordable homes in the next ten years,
                                                                                                                                     half of which will be in Auckland.

                                                                                                                                     Elsewhere in NZ consents are now
                                                                                                                                     trending sideways as similar constraints
                                                                                                                                     affect other centres as well.




Population Growth Compared
to Building Consents
Quarterly Population Change and Building Consents Nationwide

                                                                                                                                     With population growth slowing and
                                                                                                                                     building consents continuing to increase,
                                                                                                                                     the gap between the two is reducing.

                                                                                                                                     The gap is calculated by assuming 80%
                                                                                                                                     of dwellings consented translate into an
                                                                                                                                     actual increase in the number of dwellings
                                                                                                                                     (which may be generous given our results
                                                                                                                                     of consent to stock change analysis), and
                                                                                                                                     that each of those dwellings will house
                                                                                                                                     the current average number of people (2.7
                                                                                                                                     people per dwelling).

                                                                                                                                     For example, over the year to December
                                                                                                                                     2017 there were 31,127 dwellings consented
                                                                                                                                     (able to house 67,234 people), and an
                                                                                                                                     increase in population of 97,000, leaving
                                                                                                                                     a difference of almost 30,000 too many
                                                                                                                                     people for dwellings.




                                                                                                                                                          Source: Statistics New Zealand

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Consumer Confidence
ANZ-Roy Morgan Confidence Consumer

                                                                                                                                     Consumer confidence lifted in January
                                                                                                                                     with people remaining happy with their
                                                                                                                                     current financial situation.

                                                                                                                                     Consumer perception of the economic
                                                                                                                                     outlook also lifted, perhaps due to a ‘solid’
                                                                                                                                     start for the Labour-NZ First Government
                                                                                                                                     combining with a relatively stable housing
                                                                                                                                     market and a strong labour market.

                                                                                                                                     The gap in confidence between Australia
                                                                                                                                     and NZ was significantly reduced in
                                                                                                                                     December with the economic outlook in
                                                                                                                                     Australia improving.




                                                                              Source: ANZ NZ, Roy Morgan




Trans-Tasman Consumer Confidence Index




                                                              Source: Westpac NZ, McDermott Miller




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Employment
Annual Change in Employment, Full Time and Part Time

                                                                                                                                     The rate of part-time employment lifted
                                                                                                                                     however the rate of growth in full-time
                                                                                                                                     employment eased off for the fourth
                                                                                                                                     quarter in a row (albeit only marginally
                                                                                                                                     last quarter). The total number of people
                                                                                                                                     actually employed has continued to rise.

                                                                                                                                     The labour force participation rate eased
                                                                                                                                     slightly to 71.0% in Q4 2017 after peaking
                                                                                                                                     in Q3 2017 at 71.1% and the unemployment
                                                                                                                                     rate dropped further to 4.5% - the lowest
                                                                                                                                     since 2008.

                                                                                                                                     For an employment lead significant
                                                                                                                                     correction in the housing market to occur,
Labour Force Participation Rate                                                                                                      there would have to be a turnaround in
                                                                                                                                     employment with people unable to pay
                                                                                                                                     mortgages or rent.




Unemployment Rate




                                                                                                                                                          Source: Statistics New Zealand

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Interest Rates
Mortgage Interest Rates - %

                                                                                                                                     Retail banks are competing strongly for
                                                                                                                                     mortgages, with interest rates again taking
                                                                                                                                     a noticeable dip in January.

                                                                                                                                     The Official Cash Rate (OCR) remained
                                                                                                                                     on hold in February and is projected to
                                                                                                                                     remain below 2.00% until the end of 2019,
                                                                                                                                     which is good news for new borrowers
                                                                                                                                     and those coming off fixed rates.

                                                                                                                                     The new loan-to-value ratio (LVR)
                                                                                                                                     restrictions are now in place. They are only
                                                                                                                                     a minor change from previous restrictions
                                                                                                                                     with the deposit requirement for investors
                                                                                                                                     dropping from 40% to 35% and the share
Projected Official Cash Rate - %                                                                                                     of high LVR lending (above 80% LVR) to
                                                                                                                                     owner occupiers increasing from 10% to
                                                                                                                                     15%.

                                                                                                                                     The expected impact on the market is
                                                                                                                                     minimal, although it will contribute to
                                                                                                                                     a small lift in demand from those who
                                                                                                                                     were previously unable to satisfy the LVR
                                                                                                                                     requirements.




Average Two Year Fixed Rates - %




                                                                                                                                              Source: Reserve Bank of New Zealand

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Housing Overview




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Nationwide Values
Average Value of Housing Stock - New Zealand

                                                                                                                                     Nationwide value growth moderated
                                                                                                                                     over the summer holiday after a relatively
                                                                                                                                     significant lift in November.

                                                                                                                                     Three month value growth hit 3.8% at
                                                                                                                                     the end of January. This was the fastest
                                                                                                                                     rate for over a year, perhaps due to
                                                                                                                                     post-election jitters calming and buyers
                                                                                                                                     returning to the market - taking advantage
                                                                                                                                     of still-low interest rates.




Annual and Quarterly Change in Value




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Sales Volumes
Nationwide Sales Volumes

                                                                                                                                     Sales volumes in December were flat year-
                                                                                                                                     on-year, but January volumes were more
                                                                                                                                     subdued (6% down year-on-year).

                                                                                                                                     Once again sales volumes were very
                                                                                                                                     weak in Auckland. High prices and a re-
                                                                                                                                     balancing of demand/supply have reduced
                                                                                                                                     the fear of missing out, and as a result
                                                                                                                                     the ‘days to sell’ measure has begun to
                                                                                                                                     lengthen.

                                                                                                                                     Christchurch experienced a late-spring
                                                                                                                                     and summer resurgence in sales volumes
                                                                                                                                     with November, December and January all
                                                                                                                                     up on the (admittedly weak) prior year.

Nationwide Annual Change in Sales Volumes




Regional Sales Volumes Year-on-Year




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Rent
Nationwide Annual Change in Value and Rent

                                                                                                                                      Annual rental growth stabilised at 4.9%
                                                                                                                                      in December and January, illustrating a
                                                                                                                                      similar trend to value growth after both
                                                                                                                                      bottomed out in October 2017.

                                                                                                                                      Gross rental yield continues to hover
                                                                                                                                      along just over 3.0% (as it has done for 18
                                                                                                                                      months+).

                                                                                                                                      Christchurch rent continues to drop,
                                                                                                                                      although the rate of -2.8% is not as great
                                                                                                                                      as the drop witnessed through most of the
                                                                                                                                      second half of 2017.

                                                                                                                                      Meanwhile the growth in median rent in
                                                                                                                                      Dunedin is now trending downwards after
                                                                                                                                      peaking at greater than 10% growth in the
                                                                                                                                      middle of 2017.

                                                                                                                                      Tauranga’s annual rent increase of 12.1%
                                                                                                                                      is slightly misleading because it’s being
                                                                                                                                      compared to an anomaly of a month last
                                                                                                                                      January. Actual annual change in Tauranga
Gross Rental Yield - Nationwide                                                                                                       is realistically closer to 7%, which is still
                                                                                                                                      rather high – similar to Wellington (7.6%),
                                                                                                                                      where we’ve seen and heard plenty about
                                                                                                                                      the rental squeeze in the nation’s capital.




                                                                          Median Weekly Rent                          Annual Change in Rent                                   Gross Yield
 Auckland                                                                               $511                                          4.7%                                          2.1%
 Hamilton                                                                              $365                                           7.4%                                          3.5%
 Tauranga                                                                              $436                                          12.1%                                          3.2%
 Wellington                                                                            $466                                           7.6%                                          3.2%
 Christchurch                                                                          $345                                          -2.8%                                          3.6%
 Dunedin                                                                               $340                                          -5.6%                                         4.5%



                                                                           CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 17

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Market Activity
Market Activity Index

                                                                                                                                      We’re still waiting for the market to
                                                                                                                                      properly swing back into action, after
                                                                                                                                      the prevalence of public holidays in
                                                                                                                                      January and early February impacted
                                                                                                                                      both demand and subsequent activity.
                                                                                                                                      Nonetheless, relative to the same time last
                                                                                                                                      year all major centres are experiencing
                                                                                                                                      reduced activity, with Auckland the
                                                                                                                                      farthest back.




  Latest 3 Weeks Year-on-Year                                                                                                             Percentage change
  Auckland                                                                                                                                            -29%
  Hamilton City                                                                                                                                        -6%
  Tauranga City                                                                                                                                        -5%
  Wellington Region                                                                                                                                   -19%
  Christchurch City                                                                                                                                   -19%
  Dunedin City                                                                                                                                         -11%


This market activity is based on the number of automated valuations run by bank staff using our systems each week. This
number of valuations correlates very closely to the number of sales that will subsequently occur so this is an extremely
timely measure of buyer demand, more than any measure of sales. We can also track across any geographic area.




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Valuations completed
Market Activity Year-on-Year

                                                                                                                                     This map shows activity in the latest three
                                                                                                                                     weeks compared to the same three weeks
                                                                                                                                     last year.

                                                                                                                                     New Plymouth has picked up where it
                                                                                                                                     finished last year with a sustained increase
                                                                                                                                     in market activity, 24% up on the same
                                                                                                                                     time last year. Elsewhere there are only
                                                                                                                                     a handful of smaller districts across the
                                                                                                                                     country experiencing a lift in activity.




                                                    *Size of bubble represents the level of activity for the period 29 January – 18 February 2018

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Listings
New Listings

                                                                                                                                     Similar to the demand measure of market
                                                                                                                                     activity, the supply measure of new listings
                                                                                                                                     takes a few weeks to get back to ‘normal’
                                                                                                                                     levels as holiday makers drift back to
                                                                                                                                     work.

                                                                                                                                     The one month change measure is
                                                                                                                                     effectively meaningless because it’s
                                                                                                                                     comparing to Christmas-New Year period
                                                                                                                                     (when listings are scarce). The one year
                                                                                                                                     change however can be informative,
                                                                                                                                     with Wellington listings relatively weak
                                                                                                                                     and not doing much to alleviate already
                                                                                                                                     constrained supply.




 New Listings                                                       Average last 3 weeks                                1 month change                                    1 year change
 New Zealand                                                                     2,295                                           254%                                             -2%
 Auckland                                                                         732                                            334%                                             -6%
 Waikato                                                                          243                                            169%                                              4%
 Bay of Plenty                                                                     156                                           186%                                             -11%
 Wellington                                                                        218                                           330%                                             -12%
 Canterbury                                                                        361                                           378%                                              2%
 Otago                                                                             101                                           256%                                             16%




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Total Listings

                                                                                                                                      Total listings have begun to trend
                                                                                                                                      upwards again in Auckland, with new
                                                                                                                                      listings starting to lift and ‘days to sell’
                                                                                                                                      lengthening.

                                                                                                                                      The same is true around the rest of the
                                                                                                                                      country but at a reduced rate. Wellington
                                                                                                                                      continues to experience a significant
                                                                                                                                      shortage, only 2% up on the prior year
                                                                                                                                      (which was already a low point for that
                                                                                                                                      time of the year).




  Total Listings                                                            Latest week                                  1 month change                                    1 year change
 New Zealand                                                                     29,147                                             4%                                              9%
 Auckland                                                                         9,125                                             5%                                             23%
 Waikato                                                                          3,063                                             4%                                             15%
 Bay Of Plenty                                                                    2,092                                             3%                                             14%
 Wellington                                                                        1,571                                           18%                                              2%
 Canterbury                                                                       4,723                                             7%                                              8%
 Otago                                                                            1,097                                             3%                                              9%




                                                                           CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 21

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Buyer Classification
Buyer Classification - New Zealand

                                                                                                                                     First home buyers finished 2017 strongly,
                                                                                                                                     accounting for 22.2% of sales in the final
                                                                                                                                     quarter of the year but haven’t started off
                                                                                                                                     2018 quite so well, with 21.7% of sales in
                                                                                                                                     January.

                                                                                                                                     Movers have bounced back from their
                                                                                                                                     Q4 2017 slump, while multiple property
                                                                                                                                     owners remained consistent with 37.5%
                                                                                                                                     of sales. We have previously noted the
                                                                                                                                     reducing share of mortgaged multiple
                                                                                                                                     property owners among this group but
                                                                                                                                     they actually had a stronger month in
                                                                                                                                     January: accounting for almost two-
                                                                                                                                     thirds (66%) of multiple property owners
                                                                                                                                     purchases (up from 62%), perhaps
                                                                                                                                     benefitting from lower interest rates
                                                                                                                                     enabling larger loans.




                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 22

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House Price Index
Average Dwelling Value

                                                                                                                                     Values increased across most of the
                                                                                                                                     country in January, with 3.8% growth
                                                                                                                                     witnessed nationwide in the three months
                                                                                                                                     to the end of January. Auckland values
                                                                                                                                     continued a slight resurgence after
                                                                                                                                     spending most of 2017 in gradual decline.

                                                                                                                                     A similar trend is evident in Tauranga,
                                                                                                                                     however values in Hamilton have remained
                                                                                                                                     flat for almost six months.

                                                                                                                                     Wellington has seen consistent value
                                                                                                                                     growth over the same period after they
                                                                                                                                     stalled briefly in winter last year.

                                                                                                                                     The growth in values in Dunedin has been
                                                                                                                                     more modest but consistent, with 9.3%
                                                                                                                                     growth over the last 12 months.




                                                                                                                          January 2018
                                                                    Current Value                           3 months                           12 months                     Since 2007 peak
 New Zealand                                                             $671,531                              3.8%                                6.4%                                 62%
 Auckland                                                             $1,054,974                                1.6%                               0.7%                                 93%
 Hamilton                                                              $544,935                                0.3%                                 2.6%                                51%
 Tauranga                                                               $698,875                                1.7%                               3.9%                                 45%
 Wellington                                                             $634,811                               4.0%                                9.0%                                 39%
 Christchurch                                                          $494,459                                0.8%                                -0.6%                                30%
 Dunedin                                                                $392,512                               2.6%                                9.3%                                 37%



                                                                                                                    Source: CoreLogic NZ QV Monthly House Price Index




                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 23

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House Price Index
Annual Value Change

                                                                                                                                     The greatest growth in values over the last
                                                                                                                                     year has been in the districts of Hawke’s
                                                                                                                                     Bay, Horowhenua and Masterton.

                                                                                                                                     Much of Canterbury has seen little growth
                                                                                                                                     over the last 12 months, with Timaru
                                                                                                                                     and MacKenzie the exceptions. Further
                                                                                                                                     south, the Southland District (main towns
                                                                                                                                     Winton, Te Anau and Riverton) saw the
                                                                                                                                     greatest growth in the year to the end of
                                                                                                                                     January 2018.




                                                                         *Size of bubble represents the number of properties in the Territorial Authority

                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 24

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Three Month Value Change

                                                                                                                                     Three month value change by each of
                                                                                                                                     the Council areas is patchier and shows
                                                                                                                                     a few areas in the top half of the North
                                                                                                                                     Island where values have decreased (blue
                                                                                                                                     dots). These include Thames Coromandel,
                                                                                                                                     Hauraki and Western BOP.

                                                                                                                                     The greatest growth witnessed over this
                                                                                                                                     period in the North Island is in Central
                                                                                                                                     Hawke’s Bay at 8.0%.

                                                                                                                                     Three month growth also remains very
                                                                                                                                     high in the MacKenzie District, however it’s
                                                                                                                                     always best to treat these smaller areas
                                                                                                                                     (smaller dots) with caution due to fewer
                                                                                                                                     sales occurring in these areas.




                                                                         *Size of bubble represents the number of properties in the Territorial Authority

                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 25

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Main Cities Housing
Market Indicators




                                                                        CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 26

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CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 27

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Auckland Market Activity
Buyer Demand - Auckland

                                                                                                                                     Demand in Auckland has been very weak
                                                                                                                                     so far this year, in part due to the number
                                                                                                                                     of public holidays but this is not the sole
                                                                                                                                     reason. The weakness in demand may be
                                                                                                                                     a sign of further fatigue in the market. The
                                                                                                                                     latest week (up to 18 February) did see a
                                                                                                                                     lift but it’s too early to know if this will be
                                                                                                                                     sustained.

                                                                                                                                     Multiple property owners appear to
                                                                                                                                     have found their new level in Auckland,
                                                                                                                                     consistently accounting for around 40%
                                                                                                                                     of sales. We must note that each quarter
                                                                                                                                     between 25% and 33% of these are making
                                                                                                                                     their purchase without a mortgage,
                                                                                                                                     unaffected by LVRs or serviceability
                                                                                                                                     criteria (and subsequently excluded from
                                                                                                                                     RBNZ reporting).

                                                                                                                                     First home buyers also remain consistently
                                                                                                                                     active at around 23% of the market - we’ve
                                                                                                                                     previously noted this groups’ willingness
                                                                                                                                     to sacrifice location/property type to enter
                                                                                                                                     the property market and this remains true.

Buyer Classification - Auckland




                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 28

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Auckland Values
Average Value of Housing Stock - Auckland

                                                                                                                                     Values in Auckland are now up 1.6% over
                                                                                                                                     the last three months, the fastest rate
                                                                                                                                     since December 2016, but with a back
                                                                                                                                     drop of continually reducing volumes, this
                                                                                                                                     growth is unlikely to be sustained.

                                                                                                                                     Papakura continues to experience a
                                                                                                                                     strong recovery in values (up 5.1%) since
                                                                                                                                     August 2017 after seeing a 3.9% drop
                                                                                                                                     after peaking in April 2017. The rest of the
                                                                                                                                     city appears to making a slightly more
                                                                                                                                     restrained recovery after values plateaued
                                                                                                                                     or dropped throughout 2017, with
                                                                                                                                     Waitakere the only area to still be behind
                                                                                                                                     values from a year ago.




Annual and Quarterly Value Change - Auckland




                                                                                                                          January 2018
                                                                    Current Value                           3 months                           12 months                     Since 2007 peak
 Rodney                                                                 $947,856                                1.5%                                1.5%                                62%
 North Shore                                                          $1,228,920                                2.3%                                1.2%                                90%
 Waitakere                                                              $822,871                               0.5%                                -1.6%                                94%
 Auckland City                                                         $1,245,682                               1.8%                                1.7%                               100%
 Manukau                                                                $904,158                                1.2%                               0.3%                                 98%
 Papakura                                                              $700,283                                 2.3%                               2.4%                                 95%
 Franklin                                                               $673,514                                1.2%                               2.0%                                 70%

                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 29

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Auckland Suburb Value Change
Annual Value Change




                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 30

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The 12 month map of value change in
                                                                                                                                   Auckland details variance across the
                                                                                                                                   city. Parts of Central Auckland and in the
                                                                                                                                   Eastern Suburbs are seeing up to 10%
                                                                                                                                   growth, while out West and South of the
                                                                                                                                   city there are a greater number of suburbs
                                                                                                                                   where values have decreased in the last
                                                                                                                                   year.

                                                                                                                                   Parts of the North Shore are now showing
                                                                                                                                   a bit more sustained growth than
                                                                                                                                   previously witnessed.




                                                                                                                                      *Size of bubble represents the number of
                                                                                                                                                       properties in the suburb.
                                                                                                                                          Based on CoreLogic Median E-valuer

                                                                        CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 31

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Current Auckland Suburb Values
Median Value of Housing Stock




                                                                                                   20 km

                                                                                              10 km




Slight drops in value have not changed a picture of widespread unaffordability in Auckland.

There are currently still 106 suburbs where the average value of the housing stock is over one million dollars.




                                                                                                                                               *Based on CoreLogic Median E-valuer

                                                                          CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 32

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CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 33

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Hamilton Market Activity
Buyer Demand - Hamilton

                                                                                                                                     Buyer demand in Hamilton started strong
                                                                                                                                     but hasn’t been sustained and while other
                                                                                                                                     main centres saw a significant lift in the
                                                                                                                                     week ending 18 February, Hamilton did
                                                                                                                                     not.

                                                                                                                                     Multiple Property Owner activity, including
                                                                                                                                     those from Auckland, bottomed out in
                                                                                                                                     Hamilton in the middle of last year but
                                                                                                                                     they are working their way back, with 43%
                                                                                                                                     of sales going to multiple property owners
                                                                                                                                     in January.

                                                                                                                                     Over three quarters of these secured
                                                                                                                                     finance for the purchase. This is interesting
                                                                                                                                     considering the tighter Loan to Value
                                                                                                                                     Ratio limits for investors, and while these
                                                                                                                                     have now been slightly loosened by the
                                                                                                                                     Reserve Bank, it’s too soon for the change
                                                                                                                                     to have had any real effect on sales.

                                                                                                                                     Meanwhile first home buyers had a quieter
                                                                                                                                     month in January


Buyer Classification - Hamilton




                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 34

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Hamilton Values
Average Value of Housing Stock - Hamilton

                                                                                                                                     Hamilton values have flattened out since
                                                                                                                                     August 2017 after gradually growing for
                                                                                                                                     most of 2017. Due to the dip in values a
                                                                                                                                     year ago, values are only 2.6% up over the
                                                                                                                                     last year though.

                                                                                                                                     Hamilton South West has continued to
                                                                                                                                     grow recently, however Central & North
                                                                                                                                     West has experienced 4 months of falling
                                                                                                                                     values.

                                                                                                                                     Out East both the Northern and Southern
                                                                                                                                     areas have seemingly plateaued with less
                                                                                                                                     than 0.5% three month growth in each.




Annual and Quarterly Value Change - Hamilton




                                                                                                                          January 2018
                                                                    Current Value                           3 months                           12 months                     Since 2007 peak
 Hamilton Central & North West                                          $494,164                               -0.9%                                 1%                                 38%
 Hamilton North East                                                    $692,145                               0.5%                                  2%                                 54%
 Hamilton South East                                                   $494,488                                0.3%                                  3%                                 41%
 Hamilton South West                                                    $492,551                                1.8%                                 6%                                 44%



                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 35

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Tauranga Market Activity
Buyer Demand - Tauranga

                                                                                                                                     A strong start to the year for market
                                                                                                                                     activity in Tauranga has since been
                                                                                                                                     followed up with the strongest single week
                                                                                                                                     of activity since March 2017, for the week
                                                                                                                                     ending 18 February, suggesting sales for
                                                                                                                                     February could be relatively strong.

                                                                                                                                     Multiple Property owners from Auckland
                                                                                                                                     remain a weakening presence in the
                                                                                                                                     Tauranga market, however other multiple
                                                                                                                                     property owners are holding firm,
                                                                                                                                     including those requiring mortgages.




Buyer Classification - Tauranga




                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 36

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Tauranga Values
Average Value of Housing Stock - Tauranga

                                                                                                                                     Values have once again started to grow in
                                                                                                                                     Tauranga (1.7% over the last three months),
                                                                                                                                     although the annual rate of 3.9% remains
                                                                                                                                     near the low point from the last four years.

                                                                                                                                     January saw the average value reach
                                                                                                                                     $698,875, the highest on record.




Annual and Quarterly Value Change - Tauranga




                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 37

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Wellington Market Activity
Buyer Demand - Wellington

                                                                                                                                     Market activity in Wellington is following
                                                                                                                                     the typical seasonal pattern - starting
                                                                                                                                     slowly but finally kicking into action
                                                                                                                                     from late January. The upward trend
                                                                                                                                     witnessed since early spring appears to be
                                                                                                                                     continuing.

                                                                                                                                     First home buyers continue to go from
                                                                                                                                     strength to strength in the capital,
                                                                                                                                     accounting for 34% of sales in January
                                                                                                                                     2018. In Lower Hutt they were responsible
                                                                                                                                     for 42% of sales. Access to KiwiSaver
                                                                                                                                     funds and grants are assisting these
                                                                                                                                     buyers, while low interest rates are
                                                                                                                                     helping to keep mortgage repayments
                                                                                                                                     manageable.

                                                                                                                                     Meanwhile movers and to a lesser degree
                                                                                                                                     multiple property owners have kept their
                                                                                                                                     activity in check.




Buyer Classification - Wellington




                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 38

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Wellington Values
Average Value of Housing Stock – Wellington

                                                                                                                                     Values in Wellington have continued
                                                                                                                                     an upward trajectory that began in
                                                                                                                                     September last year, increasing 4.0% over
                                                                                                                                     the last three months. The annual rate of
                                                                                                                                     growth however remains below 10% as the
                                                                                                                                     muted period over winter holds it back.

                                                                                                                                     Upper Hutt’s recent exceptional growth
                                                                                                                                     has hit a speed bump, with only 1.1%
                                                                                                                                     growth over the last three months while
                                                                                                                                     Porirua (4.0%) and Wellington (3.5%)
                                                                                                                                     show no signs of slowing down.




Annual and Quarterly Change in Value - Wellington




                                                                                                                          January 2018
                                                                    Current Value                           3 months                           12 months                     Since 2007 peak
 Porirua                                                               $548,889                                4.0%                                 13%                                 44%
 Upper Hutt                                                             $470,511                                1.1%                                 9%                                 34%
 Lower Hutt                                                             $523,344                               0.6%                                  8%                                 33%
 Wellington City                                                       $764,560                                 3.5%                                 9%                                 44%



                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 39

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Christchurch Market Activity
Buyer Demand - Christchurch

                                                                                                                                     Market activity in Christchurch has
                                                                                                                                     remained muted following a similar end to
                                                                                                                                     2017, although the latest week of activity
                                                                                                                                     (ending 18 February) shows signs of a lift.

                                                                                                                                     Not much changed in terms of the types
                                                                                                                                     of buyers active between Q4 2017 and
                                                                                                                                     January 2018, with movers remaining less
                                                                                                                                     active participants and first home buyers
                                                                                                                                     remaining near their all-time share levels.

                                                                                                                                     While there appeared to be a lift in
                                                                                                                                     multiple property owner activity late last
                                                                                                                                     year in the Garden City, this is almost
                                                                                                                                     wholly attributable to those buyers not
                                                                                                                                     requiring a mortgage. They’re unaffected
                                                                                                                                     by lending criteria and interest rates and
                                                                                                                                     have maintained their activity while all
                                                                                                                                     other buyers have dropped away.




Buyer Classification - Christchurch




                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 40

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Christchurch Values
Average Value of Housing Stock - Christchurch

                                                                                                                                     Values remain very subdued in
                                                                                                                                     Christchurch, as growth of only 0.8% over
                                                                                                                                     the last three months means values are
                                                                                                                                     still 0.6% below the same time last year.

                                                                                                                                     This is evident across the City; however
                                                                                                                                     values in the Hills have finally begun to
                                                                                                                                     make some ground back after the average
                                                                                                                                     value dropped to below $650k in October
                                                                                                                                     2017.

                                                                                                                                     Over the longer term, Christchurch
                                                                                                                                     Southwest has seen the greatest growth
                                                                                                                                     since the previous peak at the end of 2007
                                                                                                                                     (39%).




Annual and Quarterly Value Change - Christchurch




                                                                                                                          January 2018
                                                                    Current Value                           3 months                           12 months                     Since 2007 peak
 Banks Peninsula                                                        $510,268                               -1.0%                                 -1%                                 6%
 Christchurch Central & North                                           $584,136                               0.9%                                  -1%                                32%
 Christchurch East                                                     $372,005                                0.6%                                  0%                                 20%
 Christchurch Hills                                                     $667,870                               2.9%                                  0%                                 21%
 Christchurch Southwest                                                 $471,587                               0.4%                                  -1%                                39%

                                                                          CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 41

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Dunedin Market Activity
Buyer Demand - Dunedin

                                                                                                                                     2018 market activity has started off
                                                                                                                                     relatively positively for Dunedin, with
                                                                                                                                     gradually increasing volumes leading to a
                                                                                                                                     strong week ending 18 February 2018.

                                                                                                                                     There has been a lift in mortgaged
                                                                                                                                     multiple property owners in Dunedin,
                                                                                                                                     including those from Auckland. This
                                                                                                                                     is a surprise considering the generally
                                                                                                                                     accepted lower level of rental stock in
                                                                                                                                     the student city and the fact that the
                                                                                                                                     policy spotlight is currently on the need
                                                                                                                                     to improve rental quality. Many were
                                                                                                                                     expecting that areas like Dunedin would
                                                                                                                                     become a less attractive investment
                                                                                                                                     option. It may be too early to draw this
                                                                                                                                     connection yet, but it’s certainly one to
                                                                                                                                     keep an eye on.




Buyer Classification - Dunedin




                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 42

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Dunedin Values
Average value of stock – Dunedin

                                                                                                                                     The growth in values in Dunedin has been
                                                                                                                                     modest but consistent, with 2.8% growth
                                                                                                                                     in the last three months and 9.3% growth
                                                                                                                                     over the last 12 months.

                                                                                                                                     Values across the Peninsula and Coastal
                                                                                                                                     areas have been volatile with values
                                                                                                                                     dropping dramatically over winter and
                                                                                                                                     quickly regaining those losses in spring
                                                                                                                                     and now showing signs of stalling again
                                                                                                                                     (although retaining 3.2% growth in the last
                                                                                                                                     three months due to prior growth).

                                                                                                                                     In Taieri, values have again started to rise,
                                                                                                                                     albeit at a slower rate than other parts of
                                                                                                                                     the City.




Annual and quarterly change in value - Dunedin




                                                                                                                          January 2018
                                                                    Current Value                           3 months                           12 months                     Since 2007 peak
 Dunedin Central & North                                                $410,278                                3.2%                                10%                                 36%
 Dunedin South                                                          $373,189                               2.0%                                  9%                                 31%
 Peninsula and Coastal                                                 $360,397                                 3.5%                                13%                                 33%
 Taieri                                                                $402,502                                 1.8%                                 7%                                 37%




                                                                         CoreLogic Monthly Property Market & Economic Update New Zealand February 2018 | 43

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