QUARTERLY PROPERTY MARKET & ECONOMIC UPDATE - NEW ZEALAND QUARTER 1, 2019 - CORELOGIC

 
QUARTERLY PROPERTY MARKET & ECONOMIC UPDATE - NEW ZEALAND QUARTER 1, 2019 - CORELOGIC
Quarterly Property Market
& Economic Update
New Zealand
Quarter 1, 2019
QUARTERLY PROPERTY MARKET & ECONOMIC UPDATE - NEW ZEALAND QUARTER 1, 2019 - CORELOGIC
Contents
 About CoreLogic                                                                                                                                                                                                                           3
           CoreLogic Data and Analytics ....................................................................................................................................................................                               3
           Legal Disclaimer ...............................................................................................................................................................................................                3
           Executive Summary ........................................................................................................................................................................................                      4

  Macro Economic and Demographic Indicators                                                                                                                                                                                                5
           New Zealand Asset Classes .........................................................................................................................................................................                             6
           NZ and Australia GDP Growth ....................................................................................................................................................................                                7
           New Zealand Population ...............................................................................................................................................................................                          8
           Migration .............................................................................................................................................................................................................         9
           Regional Building Consents .........................................................................................................................................................................                           10
           Consumer Confidence ...................................................................................................................................................................................                        10
           Employment .......................................................................................................................................................................................................              11
           Interest Rates ....................................................................................................................................................................................................            12

 Housing Overview                                                                                                                                                                                                                         13
           Lending Conditions .........................................................................................................................................................................................                   14
           Sales Volumes ...................................................................................................................................................................................................              15
           Listings .................................................................................................................................................................................................................     16
           Nationwide Values ...........................................................................................................................................................................................                  18
           House Price Index ............................................................................................................................................................................................                 19
           Rent .......................................................................................................................................................................................................................   22
           Buyer Classification .........................................................................................................................................................................................                 23

 Main Cities Housing Market Indicators                                                                                                                                                                                                    24
           Auckland Market Activity .............................................................................................................................................................................                         26
           Auckland Values ...............................................................................................................................................................................................                27
           Auckland Suburb Value Change ................................................................................................................................................................                                  28
           Current Auckland Suburb Values ..............................................................................................................................................................                                  30
           Hamilton Market Activity ..............................................................................................................................................................................                        32
           Hamilton Values ................................................................................................................................................................................................               33
           Tauranga Market Activity ..............................................................................................................................................................................                        34
           Tauranga Values ...............................................................................................................................................................................................                35
           Wellington Market Activity ...........................................................................................................................................................................                         36
           Wellington Values ............................................................................................................................................................................................                 37
           Christchurch Market Activity .......................................................................................................................................................................                           38
           Christchurch Values ........................................................................................................................................................................................                   39
           Dunedin Market Activity ................................................................................................................................................................................                       40
           Dunedin Values .................................................................................................................................................................................................               41

2 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
QUARTERLY PROPERTY MARKET & ECONOMIC UPDATE - NEW ZEALAND QUARTER 1, 2019 - CORELOGIC
About CoreLogic

CoreLogic is a leading property information, analytics and services provider in the United States, Australia and
New Zealand. CoreLogic helps clients identify and manage growth opportunities, improve performance and
mitigate risk, by providing clients with innovative, technology-based services and access to rich data
and analytics.

Whilst all reasonable effort is made to ensure the information in this publication is current, CoreLogic does
not warrant the accuracy, currency or completeness of the data and commentary contained in this publication
and to the full extent not prohibited by law excludes all loss or damage arising in connection with the data and
commentary contained in this publication.

Contact
Call us 0800 355 355

Wellington office
Level 2, 275 Cuba Street
PO Box 4072
Wellington 6140

Auckland office
Level 5
41 Shortland Street
Auckland 1010
Email: reports@corelogic.co.nz

www.corelogic.co.nz
                                              CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019 | 3

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                                                      (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
QUARTERLY PROPERTY MARKET & ECONOMIC UPDATE - NEW ZEALAND QUARTER 1, 2019 - CORELOGIC
Executive Summary
The first three months of 2019 delivered pretty much the same property market performance as for most of
2018 - sluggish sales activity and consistent (yet controlled) value growth – with the notable exception of
Auckland. It wouldn’t be any surprise to see more of the same for the rest of 2019.

First, the macroeconomic environment remains supportive. Yes, GDP growth has slowed and will probably ease
down a bit further. But at 2-2.5% both this year and next, growth will still be respectable (and probably higher
than Australia’s figures of perhaps 1.5-2%). The labour market is another strong foundation for property sales
and prices in NZ, with unemployment low. Limited wage growth isn’t however doing much to help improve
housing affordability.

Second, the lending environment is favourable for borrowers – provided of course that they can meet the
deposit, income/expense, and debt serviceability tests. For a start, the next move in the OCR now looks
likely to be a short term cut (in May or August) rather than a longer-term rise. That will at least help to keep
mortgage rates low, even if they don’t fall much further. The intense competition in the banking sector to either
win new borrowers or capture market share at refinancing time from other lenders is also leading to some
really attractive deals for borrowers, e.g. sub 4% two year and three year fixed rates.

The recent rise in lending volumes (by value) has been driven largely by first home buyers (FHBs), with
greater than 80% LVRs drawing down larger average loans (rather than more loans). The sector is however still
operating well below the mandated speed limit, which determines that no more than 20% of owner occupier
loans can be at >80% LVR. It therefore seems unlikely that the Reserve Bank will be especially concerned just
yet. In fact, there would still seem to be some impetus for overall lending volumes yet to come from the higher
LVR segment.

Within the relatively quiet overall market nationally, it’s FHBs and mortgaged investors that are of most interest
according to our Buyer Classification series. Their shares of purchases were 24% apiece in Q1 - putting FHBs
well above normal levels, and investors making a return to form, even if still below past levels. Anecdotally,
some investors are reported to be exiting the sector and selling to FHBs. But there’ll also be other investors
simply snapping up sales to boost their own portfolios, so it’s hard to envisage that the stock of available rental
property is about to change much anytime soon.

Looking specifically at Auckland, it’s not hard to see why values have dipped by 1.5% over the past year and
why further modest falls could occur. Affordability is still low (FHBs are still managing to buy using their
KiwiSaver funds and/or compromising on location/property type), listings are high and buyers aren’t in any
rush.

A key theme to watch relates to policy intervention in the housing market from both the Government and
Reserve Bank. The prospect of a broad-based capital gains tax in 2021 has been ruled out, but the effects of
last October’s Foreign Buyer Ban seem to be playing out in softer sales activity, while the tax ring-fence for
rental property losses is currently going through the parliamentary process. Although not yet law, when it
does pass, it will apply to the current tax year (starting from April 1st) – so investors will need to be factoring
this into their sums right now. Then out on the horizon we have the potential requirement for banks to hold
more capital on their balance sheets, and hence have less money to lend out. We also need to keep an eye on
KiwiBuild and how that might impact supply.

Overall, although the NZ property market is on a relatively solid footing, sales volumes are likely to remain
subdued in 2019. National average prices may edge up by about 3% from their current level of $686,523.
Auckland however looks set for further weakness.

As always, we keep a running monitor on the property market every week via our NZ Property Market Pulse
articles, so be sure to check these out on our website http://www.corelogic.co.nz/news-research/all-news/

4 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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QUARTERLY PROPERTY MARKET & ECONOMIC UPDATE - NEW ZEALAND QUARTER 1, 2019 - CORELOGIC
Macro Economic and
Demographic Indicators

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QUARTERLY PROPERTY MARKET & ECONOMIC UPDATE - NEW ZEALAND QUARTER 1, 2019 - CORELOGIC
New Zealand Asset Classes
                                     RESIDENTIAL REAL ESTATE

                                     $1.1 trillion
                                     $264 Billion in home loans

                                     COMMERCIAL/INDUSTRIAL REAL ESTATE

                                     $212 billion
                                     NZ LISTED STOCKS

                                     $146 billion
                                     NZ SUPER & KIWISAVER

                                     $94 billion
The value of residential property remains above one trillion dollars, with mortgages secured against 24% of
this value. In other words, 76% of the value of the property market is household equity.

The commercial & industrial property sector ($212bn) is much smaller than residential, as is the value of the
share market and the country’s superannuation savings.

Sources: CoreLogic NZ, Reserve Bank of NZ, NZX, NZ Super Fund, Financial Markets Authority

6 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
QUARTERLY PROPERTY MARKET & ECONOMIC UPDATE - NEW ZEALAND QUARTER 1, 2019 - CORELOGIC
NZ and Australia GDP growth
Annual Average GDP Growth (%)

            8
                                                                                         NZ
            7
                                                                                         Australia
            6
            5
            4
            3
            2
            1
            0
           -1
           -2
                                                                   Capital Economics forecast
           -3
                1990       1994         1998        2002            2006                 2010                  2014                 2018

New Zealand’s economy expanded by 0.6% in the final quarter of 2018, double the figure in Q3 (0.3%). This result was driven
by the services sector - which includes retail, business services, and tourism. By contrast, goods-producing activities lagged
a little behind in the fourth quarter.

During the 2018 calendar year, the economy expanded by 2.8%: slower than 3.1% in 2017 but hardly a disaster. That said,
growth is anticipated to cool again in 2019 (perhaps to about 2%), as migration eases and the construction impetus from
previous events such as the Christchurch and Kaikoura earthquakes fades further. However, NZ may remain slightly ahead
of Australia in both 2019 and 2020 in terms of GDP growth.

                                                                         Source: Reserve Bank of New Zealand, Capital Economics

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QUARTERLY PROPERTY MARKET & ECONOMIC UPDATE - NEW ZEALAND QUARTER 1, 2019 - CORELOGIC
New Zealand Population
Quarterly Change in National Population (persons per quarter)

 35,000
                                                                                                                    Population growth slowed again in the fourth
                               Quarterly population change                                                          quarter of 2018, from about 1.9% annually to
30 ,000                        4 quarter moving average                                                             1.7%. This was the slowest growth rate in four
                                                                                                                    years, and acts as a natural handbrake on the
 25,000                                                                                                             housing market.

 20,000                                                                                                             Once again it was net migration that pulled
                                                                                                                    the overall growth rate down. In 2017, net
 15,000
                                                                                                                    migration added 70,000 people to our
                                                                                                                    population, whereas that figure dropped
                                                                                                                    to less than 56,000 in 2018.
 10,000
                                                                                                                    At 26,000, natural population growth (births
  5,000                                                                                                             minus deaths) in 2018 was barely changed from
                                                                                                                    2017, and still in the 25,000-30,000 range that
         0                                                                                                          it’s been in for several years now.
             1991     1994     1997 2000            2003      20 06     20 09      2012        2015     2018

Population Change Composition (persons per quarter)
  25,000

                            Natural increase
  20,000
                            Net migration

  15,000

  10,000

    5,000

             0

  -5 ,0 00

-10,000
             1996       1999         2002        2005         2008          2011         2014         2017

Annual Change in Population (persons)

         New Zealand                                                                   91600

                 Auckland                            38700

         Hamilton City        3900

        Tauranga City         3500

       Wellington Cit y       3600

     Christchurch City           7000

          Dunedin City       1900

Source: Statistics New Zealand

8 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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QUARTERLY PROPERTY MARKET & ECONOMIC UPDATE - NEW ZEALAND QUARTER 1, 2019 - CORELOGIC
Migration
Long term migration (12-month rolling totals)
180,000
                     Net
                                                                                                   Unfortunately the net migration statistics are
160,000              Arrivals
                                                                                                   not as useful at present as they have been
                     Departures
140,000                                                                                            in the past, due to a change in the collection
                                                                                                   methodology and the tendency for big revisions
120,000
                                                                                                   to be made each month. Previously, migration
100,000                                                                                            was estimated on an ‘intentions method’ (what
                                                                                                   people said they planned to do). It’s now
 80,000
                                                                                                   calculated on an ‘outcomes method’ (what
 60 ,0 00                                                                                          people actually did). Because actual outcomes
                                                                                                   are not known for at least a year after a migrant
 40 ,0 00                                                                                          arrives or departs, recent patterns must be
 20 ,0 00                                                                                          statistically estimated/modelled, and that
                                                                                                   gives rise to uncertainty and revisions.
           0

-2 0, 00 0                                                                                         The trans-Tasman balance is also no longer
                                                                                                   available, because of a conscious choice by
-4 0, 00 0                                                                                         Statistics NZ to no longer track migration
          20 02      20 06          2010              2014              2018                       by residency (although they still track it by
                                                                                                   citizenship). District-level migration flows will
Comparison of old and new net migration series                                                     still be available on the new method, but just
(12-month rolling totals)                                                                          not yet.

  80,000                                                                                           The bottom line is that the net migration figures
                                                                                                   need to be treated with caution at present.
  70,000                                                                                           However, taking them at face value (with the
 60,000                                                                                            caveats firmly still in mind), NZ has had a net
                                                                                                   migration inflow of almost 61,600 people over
  50,000
                                                                                                   the past 12 months, an increase of about 10,000
 40,000                                                                                            from a year ago – driven by more arrivals and
                                                                                                   flat departures. This rise in net migration would
  30,000
                                                                                                   have resulted in higher property demand and
  20,000                                                                                           prices than otherwise would have been the case.
 10,000

           0

-10,000

- 20,000

- 30,000
           2002      2006          2010              2014               2018

                                                                Net Gain Last Year                                                        % Change
 TOTAL ALL AREAS                                                        62,733                                                                -11.6%
 Auckland Region                                                         31,417                                                               -13.7%
 Hamilton City                                                           1,887                                                                -2.0%
 Tauranga City                                                             735                                                                -24.1%
 Wellington                                                              2,917                                                                -16.7%
 Christchurch City                                                       4,722                                                                -13.5%
 Dunedin City                                                             899                                                                 -15.2%
 Main Urban Area (Other)                                                 4,719                                                               -14.3%
 Rural Centres                                                            3,713                                                              -23.0%
 Not applicable/Not stated                                               11,724                                                                3.4%

                                                                                                                                 Source: Statistics New Zealand
                                  *Note that these figures relate to Q3 2018. The next publication date for these figures from Statistics NZ is yet to be advised.

                                                             CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019 | 9

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QUARTERLY PROPERTY MARKET & ECONOMIC UPDATE - NEW ZEALAND QUARTER 1, 2019 - CORELOGIC
Regional Building Consents
New dwelling consents trend (consents per month)                                                                            The boom in residential building consents
                                                                                                                            has continued over the past three months,
                                                                                                                            with Statistics NZ’s trend measure (which
  1,200                                                                                                                     smooths out seasonal and other fluctuations)
                                                                                                                            showing that in the year to February 2019 more
                                                                                                                            than 34,100 new dwellings were approved to
  1,000                                                                                                                     be built. That was 8.8% higher than a year ago,
                                                                                                                            itself already a high figure (31,375). This is the
                                                                                                                            first time that consents have broken above
    800                                                                                                                     34,000 annually on this measure.

                                                                                                                            Auckland remains the key growth area,
    600                                                                                                                     although the Waikato and Wellington regions
                                                                                                                            have also been contributing. By property type,
                                                                                                                            it’s been smaller dwellings (e.g. apartments,
    400                                                                                                                     flats) driving the growth, particularly in
                                                                                                                            Auckland. Indeed, more than half of the recent
                                                                                                                            consents in Auckland have been small dwellings,
    200                                                                                                                     with these properties in our biggest city now
                                                                                                                            making up more than 20% of all consents across
                                                                                                                            New Zealand. This is a good thing from the
         0                                                                                                                  point of view of housing a growing population.
          1995              1999             2003             2007               2011              2015             2019
                                                                                                                            It’s important to note however that as many
                                                                        Source: Statistics New Zealand                      as half of the recent consents in Auckland have
                                                                                                                            simply been replacing demolished properties,
                                                                                                                            so we’re cautious of the emerging view that
                                                                                                                            the city’s shortfall is starting to be eroded
                                                                                                                            more significantly. Very few of the new-builds
                                                                                                                            in Auckland are going into lower value segments
                                                                                                                            either, so there’s still a clear case for some kind
                                                                                                                            of intervention (e.g. KiwiBuild).

Consumer Confidence
ANZ-Roy Morgan Consumer Confidence (index, monthly)

     160                                                                                                                    After a lull in the middle of last year, consumer
                                                                                                                            confidence on the ANZ-Roy Morgan measure
     140                                                                                                                    has edged higher over the past few months,
                                                                                                                            reaching 121.8 in March. That’s a couple of points
     120                                                                                                                    above the long-term average, albeit below
                                                                                                                            where confidence was a year ago (128.0
                                                                                                                            this time last year).
     100
                                                                                                                            It can sometimes be a little tricky to
      80                                                                                                                    disentangle all of the various influences
                                                                                                                            on consumer confidence, but given that
      60                                                                                                                    unemployment is still low and mortgage rates
                                                                                                                            are very favourable it’s not too hard to explain
                                                                                                                            slightly above-average levels of sentiment at
      40                                                                                                                    present. At the margin, this should support
                                                                                                                            activity in the housing market.
       20

         0
         2004                   2007                  2010                   2013                  2016              2019

                                                                           Source: ANZ NZ, Roy Morgan

10 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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Employment
Annual change in employment,                                                                            The slowdown in employment growth continued
                                                                                                        in the fourth quarter of 2018, with the year-on-
full time and part time
                                                                                                        year figure falling from 2.9% in Q3 to just 2.4%.
10%                                                                                                     That was the slowest rate since the first quarter
                                                                                                        of 2016. Full-time employment growth slowed
 8%                                                                                                     from 3.6% year-on-year to 3.1%, while part-time
                                                                                                        employment actually fell by 0.4% in the year to
 6%                                                                                                     Q4 2018. A drop in that figure hadn’t occurred
                                                                                                        since Q3 2013.
 4%
                                                                                                        That said, we need to bear in mind that
 2%                                                                                                     employment growth has been strong for
                                                                                                        an extended period and as the number of
 0%                                                                                                     people employed rises (and fewer people are
                                                                                                        unemployed), it’s simply not possible to keep
-2 %
                                                                                                        employment growing at the same rates as
                                                                                                        before. Indeed, the labour force participation
-4 %
                                                                                                        rate - the share of the working age population
-6 %
                                                                                                        that are either employed or looking for work -
                                                                                                        continues to hover at about 71%, a record high.
-8 %                                                                                                    The unemployment rate remains below 4.5%,
   1987    1990     1994     1998     2001     20 05      20 09    2012      2016                       on a par with previous record lows.

                                                                                                        In other words, the labour market is still robust
Labour force participation rate (%)                                                                     and actually, there are shortages of labour in
72                                                                                                      certain industries (such as construction). This
                                                                                                        provides a solid base for the property market,
                                                                                                        both in terms of sales volumes and property
70                                                                                                      values. With most people in work, the risks
                                                                                                        of repayment problems and mortgagee
68                                                                                                      sales are low.

66

64

62

60

58
  1986    1989     1993     1997    2000     20 04     20 08      2011    2015

Unemployment Rate
 12

 10

 8

 6

 4

 2

 0
  1986    1989    1993     1997    2000    2004   20 08     2011     2015                                                             Source: Statistics New Zealand

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                                                                            (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
Interest Rates
Mortgage Interest Rates (%)                                                                                         The latest OCR review from the Reserve Bank
                                                                                                                    surprised most analysts by flagging that a near
   25
                                                                                                                    term rate cut (rather than a longer term rate
                                                       Floating mortgage interest rates                             rise) is more likely to be the next move.
                                                       2 year fixed rate
                                                                                                                    The timing of that potential cut remains
   20
                                                                                                                    uncertain, but could be as soon as May,
                                                                                                                    or failing that, August.

                                                                                                                    The Reserve Bank’s OCR projections shown in
   15
                                                                                                                    the charts here pre-date that announcement,
                                                                                                                    but even though they don’t contain a rate cut
                                                                                                                    in the future path shown, the key message is the
   10
                                                                                                                    same: official interest rates will be low for some
                                                                                                                    time to come, and this bodes well for borrowers.
                                                                                                                    It’s an even more favourable environment for
     5
                                                                                                                    borrowers when you also consider the intense
                                                                                                                    competition between banks at present (witness
                                                                                                                    the re-emergence of mortgage rate wars).
     0
                                                                                                                    In turn, this will underpin a decent level of
     1965       1971      1977       1983      1989      1995      2001      2007       2013       2019
                                                                                                                    property sales and support house prices.
Official Cash Rate and Mortgage Rates (%)                                                                           However, there are some upside risks to
  12                                                                                                                mortgage rates over a 3-5 year horizon. Most
                                                                                                                    importantly, the Reserve Bank is likely to impose
  10
                                                                                                                    extra capital requirements on banks and it’s
                                                                                                                    been estimated that this need to for them
                                                                                                                    to hold more money on their balance sheets
    8                                                                                                               could force up mortgage rates by about one
                                                                                                                    percentage point.
    6
                                                                                                                    Of course, many recent borrowers will be well
                                                                                                                    prepared for that anyway, given that they’ve
    4                                                                                                               already had to pass tougher serviceability
                                                                                                                    tests to get their loan in the first place (such as
                                                                                                                    satisfying the bank that they could still service
    2                                                                                                               the mortgage at a theoretical interest rate of
                                                                                                                    7-8% not just the current 4-5%).
    0
    20 00        20 03       20 06        20 09        2012         2015         2018         2021

Average Two Year Fixed Rates (%)
 5.20 %

 5.10 %

 5.00 %

 4.90 %

 4.80 %

 4.70 %

 4.60 %

 4.50 %

Sources: Reserve Bank of New Zealand and interest.co.nz

12 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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Housing Overview

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Lending conditions
Annual Change in Gross New Lending Flows                                                                            Gross new lending has continued to rise
                                                                                                                    over the past three months, with February’s
($m per month)
                                                                                                                    mortgage lending figure ($4.8bn) up by about
                                                                                                                    $130m from a year earlier. That extended the
 1,500
                                                                                                                    run of increases to 11 months (and the 13th in
 1,000
                                                                                                                    the past 14 months), with larger average loans
                                                                                                                    rather than a rise in the number of loans being
   50 0                                                                                                             the key driver.

       0                                                                                                            By borrower type, the overall increases in
                                                                                                                    mortgage lending continue to be driven by
  -500
                                                                                                                    owner-occupiers, with investors still showing
-1 ,000
                                                                                                                    broadly flat volumes year-on-year. In February,
                                                                                                                    for example, the flow of lending to owner-
                   Investor                                                                                         occupiers was $3.9bn, about $280m higher than
-1,500
                   Owner-occupier                                                                                   a year ago. By loan type, the share of lending on
-2 ,0 00                                                                                                            interest-only terms remains far lower (28%) than
                                                                                                                    it was at the peak in May 2016 (41%).
-2 ,500
           2016                     2017                       2018                        2019
                                                                                                                    Much of the growth in lending lately has been
High LVR Lending to Owners and Investors                                                                            driven by first home buyers (FHBs) with less
                                                                                                                    than a 20% deposit. However, we doubt that
(% of new lending)                                                                                                  the Reserve Bank will be overly concerned
                                                                                                                    about this just yet. First, given the banks’
  25%
                                                                                                                    current strict lending criteria (e.g. income and
                                                                                                                    expense testing, debt servicing ability), those
 20 %
                                                                                                                    FHBs getting loans will tend to only be the
                                                                                                                    ‘best’ borrowers anyway – and they’re more
                                                                                                                    likely to keep servicing the debt in the (unlikely)
  15%                                                                                                               event of a major economic/property downturn.

                                                                                                                    Second, the LVR speed limits remain some way
  10%                                                                                                               off in the distance. The current speed limit for
                                                                                                                    high LVR owner-occupier borrowing is 20% –
                                                                                                                    but the actual figure for February was down at
   5%                                                                                                               just 12%. (Note that the figures for investors at
                                                                                                                    the new speed limit, i.e. a 5% cap for borrowers
                                                                                                                    with less than a 30% deposit, or 70% LVR, are
   0%                                                                                                               not available until July. The lending flows at the
    Oc t 16       Feb 17      Jun 17       Oct 17     Feb 18       Jun 18      Oct 18                               old 65% LVR mark have been discontinued.)

Refinancing Profile for Mortgages (% of stock)                                                                      Looking ahead, the rise in mortgage lending
                                                                                                                    looks set to roll on, giving support to sales
                                                                                                                    volumes and property values. Competition
   40 %
                                                                                                                    amongst the banks will stay pretty intense
   35 %                                                                                                             and this will lead to more attractive deals for
                                                                                                                    borrowers. With more than 80% of mortgage
   30 %                                                                                                             debt in NZ on a fixed interest rate, household
                                                                                                                    finances also look relatively resilient.
   25%

   20 %

   15%

   10%

     5%

     0%

Source: Reserve Bank of New Zealand

14 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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Sales Volumes
Nationwide Sales Volumes (monthly total)                                   There were 7,973 property sales across NZ
                                                                           in March, down by 12% from a year earlier and
                                                                           the lowest number for the month of March since
                                                                           2011. Auckland was even weaker, with sales
                                                                           down by 16% from a year ago. In other words,
                                                                           it’s still a pretty soft property market in terms
                                                                           of volumes, both nationally and in Auckland.

                                                                           However, to an extent there are different reasons
                                                                           for this. Around most of NZ, the stock of listings
                                                                           available on the market is relatively low, so sales
                                                                           activity is being restrained more by a lack of
                                                                           choice for buyers rather than an absence of
                                                                           demand. In that environment, it’s not surprising
                                                                           that values are rising.

                                                                           In Auckland, however, listings are high,
                                                                           so the lack of sales can be attributed to
                                                                           soft demand. Indeed, the choice available to
                                                                           buyers in Auckland means that they don’t need
                                                                           to rush – and equally, with unemployment and
                                                                           interest rates low, vendors generally aren’t
Nationwide Annual Change in Sales Volumes (%)                              desperate either. So days to sell is rising and
                                                                           sales themselves have dropped. For vendors
                                                                           that do need to sell, prices are dipping a little.

                                                                           The Foreign Buyer Ban is probably also
                                                                           playing a role in reducing turnover, but at the
                                                                           same time this will also have at least opened
                                                                           up some opportunities for would-be domestic
                                                                           buyers to return to the market.

Regional Sales Volumes (year-on-year % change)

                                      CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019 | 15

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Listings
New listings (three-week rolling total)
                                                                                                                     As per normal, new listings rose in January
                                                                                                                     and February as the market resumed after the
                                                                                                                     holiday period. However, they’ve peaked for this
                                                                                                                     season now and will tail off further as winter
                                                                                                                     sets in. Compared to a year ago, the still-tight
                                                                                                                     markets in Wellington and Otago have at least
                                                                                                                     started to see more of a response from would-
                                                                                                                     be vendors, with new listings rising in response
                                                                                                                     to the growth in prices.

    New Listings                                                        Average last 3 weeks                        1 month change              1 year change
   New Zealand                                                                       2,295                               -7%                          8%
   Auckland                                                                            671                               -11%                        -8%
   Waikato                                                                             237                               -15%                         5%
   Bay of Plenty                                                                        171                              -14%                        4%
   Wellington                                                                          216                               0%                          27%
   Canterbury                                                                          331                               -12%                        10%
   Otago                                                                               127                               -6%                         48%

16 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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Listings
Total listings
                                                               Total listings across NZ as a whole are 7% higher
                                                               than they were a year ago, driven by Otago,
                                                               Auckland, and to a lesser extent Waikato and
                                                               Wellington. In Auckland, listings were already
                                                               high, so this is just an added headwind for
                                                               values (which have already drifted a little
                                                               lower in the past few months).

                                                               But in Otago and Wellington, listings were
                                                               starting from a low base, and so the recent rises
                                                               probably won’t be enough to take the steam
                                                               out of property value growth just yet. The stock
                                                               of property on the market (i.e. listings) is pretty
                                                               much unchanged from a year ago in Canterbury.

  New Listings   Average last 3 weeks                       1 month change                                    1 year change
 New Zealand           32,372                                          2%                                              7%
 Auckland               11,121                                         2%                                             14%
 Waikato                3,551                                          5%                                              9%
 Bay of Plenty          2,290                                          3%                                              6%
 Wellington             1,697                                          6%                                              8%
 Canterbury             4,965                                         -2%                                              1%
 Otago                  1,327                                          3%                                             18%

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Nationwide Values
Average Value of Housing Stock - New Zealand ($)                                                                    National average property values increased
                                                                                                                    by 2.6% in the year to March 2019, a slowdown
                                                                                                                    from the figure of 3.0% recorded in February.
                                                                                                                    That dip in growth may have been small, but
                                                                                                                     it took the figure down to its slowest pace
                                                                                                                    since December 2011 (2.3%), when the market
                                                                                                                    was finally accelerating and permanently
                                                                                                                    emerging from the GFC-induced lull.

                                                                                                                    Of course, although they’ve slowed, values are
                                                                                                                    still growing – boosted by a rising population
                                                                                                                    (albeit also slowing), the undersupply of
                                                                                                                    properties, and low unemployment and
                                                                                                                    mortgage rates. Indeed, at more than $686,500
                                                                                                                    in March, the average property in NZ hasn’t
                                                                                                                    become any more affordable in recent months.
                                                                                                                    A year ago, the average property was about
                                                                                                                    $17,400 cheaper (at around $669,100).

Annual and Quarterly Change in Value (%)

18 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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House Price Index
Average Dwelling Value ($)                                                 Dunedin is still easily the strongest of the
                                                                           main centres in terms of property value growth,
                                                                           with an increase of 13.3% in the year to March.
                                                                           Wellington is also rising steadily, with average
                                                                           values up by 8.4% over the past 12 months.
                                                                           Robust demand and a tight supply of listings
                                                                           on the market are boosting values in both
                                                                           places. Meanwhile, Tauranga and Hamilton
                                                                           are still seeing rising prices, just slower than
                                                                           Wellington and Dunedin.

                                                                           By contrast, Christchurch remains a flat
                                                                           market, with value growth hovering around
                                                                           zero (0.6%y/y in March), as it has done for about
                                                                           two years now. In Auckland, property values
                                                                           have weakened over the past few months, and
                                                                           were down by 1.5% in the year to March – that’s
                                                                           the biggest annual fall for a decade, with values
                                                                           being held back by low affordability, lots of
                                                                           listings and no rush from buyers.

                                                                            March 2019
                             Current Value                 3 months                            12 months                     Since 2007 peak
 New Zealand                   $686,523                        0.5%                                2.6%                                 66%
 Auckland                     $1,039,917                      -0.8%                                -1.5%                                91%
 Hamilton                      $580,285                         1.6%                               4.5%                                 61%
 Tauranga                      $733,102                         1.7%                               3.7%                                 52%
 Wellington                    $702,896                        2.2%                                8.4%                                 54%
 Christchurch                  $497,298                         0.1%                               0.6%                                 31%
 Dunedin                       $451,199                        3.7%                                13.3%                                58%

                                                                    Source: CoreLogic NZ QV Monthly House Price Index

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House Price Index
Annual Value Change (%)

Over the past 12 months, the sluggish markets in Canterbury and Auckland
(as well as the West Coast of the South Island) can be clearly seen on a map view.
By contrast, the stronger markets have tended to be in the central and eastern parts
of the North Island, and to a lesser extent in Otago and Southland.

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

20 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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Three Month Value Change (%)

The emerging weakness in Auckland is the clearest feature of the timelier three
month changes in values, with several parts of the wider city/region showing blue
(modest price falls). Most other parts of the country look stronger, other than again
Canterbury and parts of the upper South Island.

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

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Rent
National Annual Change in Value and Rent (%)

 25%                                                                                                                       National rents averaged $433 per week in
                                                                                                                           the three months to March 2019, up by 6.0%
                                                                                                                           from $408 a year earlier. Rental growth has
20 %
                                                                                                                           ticked up a few notches in the past few months,
                                                                                                                           as landlords perhaps try to recoup the extra
15%                                                                                                                        costs imposed on them from new government
                                                                                                                           measures such as insulation requirements.
10%
                                                                                                                           However, a 6.0% annual rise in rents isn’t
                                                                                                                           completely out of sync with past norms.
   5%                                                                                                                      Ultimately, any rent increases that landlords
                                                                                                                           can successfully push through tend to be
   0%                                                                                                                      anchored simply by how much tenants can
                                                                                                                           afford to pay – itself determined by wage
                                                                                                                           growth. So with wage growth relatively limited
 -5 %                                                                                                                      at present, we wouldn’t envisage rental growth
                                                                                                                           accelerating much further.
-10%
                                                                                                                         Several of the main centres are seeing sizeable
                                                                                                                         rises in rents at present – at least 7% annually in
-15%                                                                                                                     Wellington, Dunedin, Tauranga, and Hamilton. In
    1998               20 01          20 04           20 07            2010            2013            2016         2019 Wellington and Dunedin in particular, rents will
                                                                                                                         be rising for the same reason as property prices
Gross Rental Yield – National (%)                                                                                        – shortages of property and robust demand.

   6%                                                                                                                      From an investors’ perspective, it will be
                                                                                                                           heartening to see gross rental yields now
                                                                                                                           rising, after a long period where they’ve
   5%                                                                                                                      dropped. Of course, from the troughs of 3.1%
                                                                                                                           nationally in 2017, the current average yield of
                                                                                                                           3.3% isn’t exactly a huge amount higher – but
                                                                                                                           given the slowdown of capital gains, at least it’s
   4%                                                                                                                      moving in the right direction for landlords.

   3%

   2%

   1%

  0%
    1998              20 01           20 04           20 07            2010            2013            2016         2019

                                                                             Median Weekly Rent                      Annual Change in Rent               Gross Yield
  Auckland                                                                                 $526                                 2.7%                         2.2%
  Hamilton                                                                                 $389                                 7.2%                         3.5%
  Tauranga                                                                                $466                                  8.0%                         3.3%
  Wellington                                                                               $525                                 8.9%                         3.3%
  Christchurch                                                                             $372                                 3.5%                         3.9%
  Dunedin                                                                                  $352                                 8.5%                         4.1%

                                                                                                                                           Sources: CoreLogic NZ and MBIE

22 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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Buyer Classification
Buyer Classification – New Zealand (% of sales)

                                                                                             Many of the same patterns that we saw for
30%                                                                                          buyer classification in 2018 have remained
      30%                                                                        27%         in place in the first three months of 2019.
      26%                                                                                    Movers (i.e. existing owner occupiers who are
                                                                                24%          relocating) remain slightly less of a presence
                                                                                             than normal in terms of their percentage share
      21%                                                                       24%          of purchases, with the key areas of interest
20%         Mover                                                                            being activity from first home buyers (FHBs)
            First Home Buyer                                                                 and multiple property owners (MPOs) with
            Multiple Property Owner Mortgage
            Multiple Property Owner Cash                                                     a mortgage.
            New to Market
            ReEntry                                                               13%        Across NZ, FHBs accounted for 24% of
            Other                                                                            purchases in Q1 2019, basically unchanged
10% 10%                                                                                      from the final two quarters of 2018. However,
                                                                                             putting that into a longer-term context, FHBs
                                                                                   6%        have a larger market share than at any time
      5%
                                                                                             since 2007 – and are certainly playing a more
      4%                                                                           5%
                                                                                             important role than when they only made 18% of
      4%                                                                           2%
                                                                                             purchases back in Q1 2014. Access to KiwiSaver
 0%                                                                                          for the deposit and a willingness to compromise
            2006    2008     2010     2012       2014      2016        2018                  on location and/or property type (and hence
                                                                                             access lower value housing) are factors allowing
                                                                                             FHBs to continue in the market.
NZ Property Transfers by Non-Citizens or no Resident Visa
(% of total transfers)                                                                       Mortgaged MPOs have arrested the slide that
                                                                                             they experienced in the aftermath of LVR III
 3.5%
                                                                                             in October 2016 (which required them to have
                                                                                             a 40% deposit).After hitting a trough of 22%
 3.0%                                                                                        in Q4 2017, they now account for 24% of
                                                                                             purchases. That’s the same as FHBs, whereas
                                                                                             historically mortgaged MPOs have tended
 2.5%                                                                                        to enjoy a clear buffer over FHBs in terms of
                                                                                             market share. One difference now is that with
                                                                                             gross rental yields generally low, it’s harder for
 2.0%
                                                                                             some would-be investors to make the sums
                                                                                             stack up – especially since costs are rising too
 1.5%                                                                                        (e.g. extra insulation requirements, the tax ring-
                                                                                             fence for rental property losses).

 1.0%                                                                                        As noted, movers are just ticking along. Their
                                                                                             share of purchases in Q1 2019 was 27%, down a
                                                                                             touch from 28% a year ago and not really much
 0. 5%
                                                                                             different from historical norms. With the costs
                                                                                             involved to move and also many with already-
0. 0%                                                                                        large mortgages, staying in the current property
         2016 Q4       2017 Q2       2017 Q4         2018 Q2            2018 Q4              and perhaps renovating (rather than relocating)
                                                                                             is a choice many people are making currently.
                                               Source: Statistics New Zealand

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Main Cities Housing
Market Indicators

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Auckland Market Activity
Buyer Demand – Auckland (volume index)

                                                                                                                          Buyer demand as measured by valuations
                                                                                                                          activity is still subdued in Auckland, which isn’t
                                                                                                                          surprising given low affordability and no real
                                                                                                                          need to rush to make a purchase (because
                                                                                                                          listings/choice are high).

                                                                                                                          The fascinating aspect of buyer classification in
                                                                                                                          Auckland is that FHBs are the biggest individual
                                                                                                                          buyer group (27% of purchases), even though
                                                                                                                          the average property in the city costs more
                                                                                                                          than $1m. FHBs haven’t been this important to
                                                                                                                          Auckland’s demand since back in 2006-07, and
                                                                                                                          the latest figures surely reflect the willingness
                                                                                                                          of FHBs to move further out from the CBD or
                                                                                                                          to buy a smaller dwelling.

                                                                                                                          In terms of their share of purchases,
                                                                                                                          Auckland’s movers and mortgaged multiple
                                                                                                                          property owners (MPOs) are less active than
                                                                                                                          normal. It’s likely that many movers with
                                                                                                                          already-large debts are just preferring to
                                                                                                                          sit tight for now, while the low gross yields
                                                                                                                          (sometimes less than 2%) on offer in Auckland
Buyer Classification – Auckland (% of sales)                                                                              are probably keeping a lid on the new demand
                                                                                                                          for property from investors.

                                                                                                                          There are reasonably clear signs in these figures
                                                                                                                          that the Foreign Buyer Ban is having an effect
                                                                                                                          in Auckland. The market share of ‘cash MPO’
                                                                                                                          (which will cover domestic cash investors,
30%
        28%                                                                                                               but also some overseas buyers) has reduced
                                                                                                                    27%   recently, as has the ‘new to market’ category.
        27%                                                                                                               People from Australia and Singapore are exempt
        27%                                                                                                         25%
                                                                                                                          from the ban, and foreign buyers can still invest
                                                                                                                    24%   and hold apartments in large developments –
20%           Mover                                                                                                       but even so, there are signs in the latest buyer
              Multiple Property Owner Mortgage                                                                            classification stats that the ban has taken a
              Multiple Property Owner Cash                                                                                reasonable chunk of foreign buyers out of
              First Home Buyer                                                                                            the market.
              New to Market
              Other
 10%          ReEntry                                                                                               12%

        7%                                                                                                          6%

        4%                                                                                                          4%
  0%                                                                                                                2%
                2006           2008            2010           2012          2014           2016           2018

26 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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Auckland Values
Average value of housing stock Auckland ($)

                                                                               The falls in Auckland property values in recent
                                                                               months (which, to be clear, are only modest so
                                                                               far) have been relatively widespread across the
                                                                               area. Only Rodney has escaped price falls on
                                                                               both a three-month and twelve-month horizon,
                                                                               with the weakest market over the past year
                                                                               being North Shore (down by 3.1%).

                                                                               The drops in the past 12 months have been
                                                                               1-2% in Papakura, Waitakere, Auckland City and
                                                                               Manukau, and only a minor 0.5% in Franklin.

Annual and quarterly value change Auckland (%)

                                                                                March 2019
                                 Current Value                 3 months                            12 months                     Since 2007 peak
 Rodney                            $953,096                        0.2%                                0.3%                                 62%
 North Shore                      $1,197,945                       -1.2%                               -3.1%                                86%
 Waitakere                         $814,078                         -1.1%                              -1.3%                                92%
 Auckland City                    $1,230,817                      -0.2%                                 -1.1%                               98%
 Manukau                           $892,867                        -1.5%                                -1.1%                               95%
 Papakura                          $691,235                        -1.4%                               -1.7%                                92%
 Franklin                          $671,797                       -0.3%                                -0.5%                                70%

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Auckland Suburb Value Change
Annual value change (%)

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Even in a flat to slightly falling market, there’ll always
                     be variation. Currently, the weakness of values is centred
                     around the North and East of Auckland, with parts of the
                     West and South faring a little better. One key reason for
                     this will be that property is still a bit more affordable in
                     the West and South, so buyer demand is slightly stronger.

                                                                 *Size of bubble represents
                                                      the number of properties in the suburb.

                                                         Based on CoreLogic Median E-valuer

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Current Auckland Suburb Values
Auckland suburb values 2018 ($)

Over the past five years, almost all parts of the country have seen large rises in property values. CoreLogic’s interactive
‘Mapping the Market’ product (www.corelogic.co.nz\mapping-market) shows these changes across the country, it’s freely
available and updated quarterly. The heatmaps in ‘Mapping the Market’ are point-in-time snapshots from 2014 and 2019.

Auckland is illustrated in the heatmap here. There are no longer any suburbs with a median property value below $500,000
in Auckland. Five years ago, about 20% of all suburbs were below that $500k threshold. At the end of February 2014, 13.8%
of suburbs had a median value of at least $1m. Now that figure has risen to 48.0%.

*Based on CoreLogic Median E-valuer

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Hamilton Market Activity
Buyer Demand – Hamilton (volume index)

                                                                                                                          Similar to the story in Auckland,
                                                                                                                          mortgaged MPOs are just stepping back
                                                                                                                          a bit in Hamilton, and first home buyers
                                                                                                                          have come in and now account for a
                                                                                                                          record high share of purchases (29%) –
                                                                                                                          as well as that, they’re actually the
                                                                                                                          largest individual buyer group.

                                                                                                                          Mortgaged MPOs (investors) accounted
                                                                                                                          for 27% of Hamilton property purchases
                                                                                                                          in Q1 2019, the lowest for more than a
                                                                                                                          decade. Admittedly, at 11%, there is a little
                                                                                                                          more activity from cash MPOs in Hamilton
                                                                                                                          than typically tends to be the case.

                                                                                                                          Movers are also relatively inactive in
                                                                                                                          Hamilton (22%), so it’s become a key first
                                                                                                                          home buyer market. At 29%, FHBs’ share
                                                                                                                          of purchases in Q1 2019 was the largest of
                                                                                                                          any individual group, and well above their
                                                                                                                          previous best of 27% back in late 2006.

Buyer Classification – Hamilton (% of sales)

40%

         31%
30%                                                                                                                 29%
         27%
                                                                                                                    27%
         25%
                                                                                                                    22%
20%            First Home Buyer
               Mover
               Multiple Property Owner Cash
               Multiple Property Owner Mortgage
               New to Market
               ReEntry                                                                                              11%
 10%           Other
     7%                                                                                                             7%
     4%                                                                                                             4%
  0% 3%                                                                                                             1%
                  2006          2008           2010           2012           2014          2016           2018

32 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

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Hamilton Values
Average value of housing stock – Hamilton ($)

                                                                               Hamilton’s average property value rose by 1.6%
                                                                               in the first three months of 2019, with the rise
                                                                               over the full 12-month period to March coming
                                                                               in at 4.5%.

                                                                               Hamilton South East has shown the largest gain
                                                                               in average property values since March last year
                                                                               (7.0%), also recording a figure of 2.0% in the first
                                                                               three months of 2019 alone. The smallest gain
                                                                               in property values over the past 12 months has
                                                                               been in Hamilton North East (at 3.0%), where
                                                                               average values are already the highest (at more
                                                                               than $722,000).

Annual and quarterly change in value – Hamilton (%)

                                                                                March 2019
                                 Current value                 3 months                            12 months                          Since Peak
 Hamilton Central & North West     $535,166                         1.3%                               4.0%                                 50%
 Hamilton North East               $722,263                         1.3%                               3.0%                                 61%
 Hamilton South East               $535,462                        2.0%                                7.0%                                 53%
 Hamilton South West               $519,467                         1.8%                               4.0%                                 52%

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Tauranga Market Activity
Buyer Demand – Tauranga (volume index)

                                                                                                                          In terms of the main centres of NZ, Tauranga’s
                                                                                                                          buyer classification make-up is different to the
                                                                                                                          others. First home buyers are generally less of
                                                                                                                          a presence in Tauranga, partly because house
                                                                                                                          prices are high in relation to local incomes.
                                                                                                                          By contrast, movers from both within the city
                                                                                                                          and from elsewhere – who have more wealth
                                                                                                                          and equity behind them – tend to be the key
                                                                                                                          purchasing group.

                                                                                                                          Indeed, in Q1 2019, movers accounted for 35%
                                                                                                                          of property purchases in Tauranga – that’s not
                                                                                                                          far off previous cyclical peaks. By contrast, FHBs
                                                                                                                          made just 17% of purchases, while the general
                                                                                                                          drop-off in market share for mortgaged MPOs
                                                                                                                          that’s been in progress since early 2016 hasn’t
                                                                                                                          really turned around yet either. They accounted
                                                                                                                          for 22% of purchases in Q1 2019.

Buyer Classification – Tauranga (% of sales)

                                     First Home Buyer
                                     Multiple Property Owner Mortgage
40%                                  Multiple Property Owner Cash
                                     Mover
                                     New to Market
       33%                           ReEntry
                                                                                                                    35%
                                     Other
30%

                                                                                                                    22%
       23%
20%
       16%
                                                                                                                    17%
        15%

 10%                                                                                                                12%

       6%                                                                                                           6%
                                                                                                                    6%
        4%
        3%                                                                                                          2%
  0%
                  2006           2008           2010           2012           2014           2016           2018

34 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

© Copyright 2019. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest
(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
Tauranga Values
Average value of housing stock – Tauranga ($)

                                                                              Average property values in Tauranga were up by
                                                                              1.7% in the first three months of 2019, taking the
                                                                              gain over the last 12 months as a whole to 3.7%.
                                                                              The level in Tauranga is now $733,102, about
                                                                              $26,000 higher than a year ago and $57,000
                                                                              above two years ago.

Annual and quarterly change in value – Tauranga (%)

                                       CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019 | 35

                                                © Copyright 2019. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest
                                                  (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
Wellington Market Activity
Buyer Demand – Wellington (volume index)

                                                                                                                          Overall activity levels in Wellington are perhaps
                                                                                                                          not as high as might be thought, given that the
                                                                                                                          steady growth in values that’s occurring would
                                                                                                                          normally be associated with a busy market.
                                                                                                                          However, it needs to be noted that listings are
                                                                                                                          low – so activity is likely to have been restrained
                                                                                                                          simply because of a limited supply of stock on
                                                                                                                          the market actually available to buy.

                                                                                                                          The purchases that are being made are often
                                                                                                                          going to first home buyers – in fact, they’re
                                                                                                                          accounting for as high a share (33%) as ever
                                                                                                                          before, and they’re the largest individual
                                                                                                                          buyer group.

                                                                                                                          The next largest buyer group, which is
                                                                                                                          mortgaged investors, are quite a long way
                                                                                                                          back, with a 27% market share. Although that’s
                                                                                                                          lower than normal, investors have at least made
                                                                                                                          a comeback in the past few quarters, from a
                                                                                                                          trough of 23% in Q4 2017. Rising rents and yields
                                                                                                                          in Wellington may have helped entice some
                                                                                                                          new investors into the market.

                                                                                                                          The recent comeback of mortgaged investors
Buyer Classification – Wellington (% of sales)                                                                            has come at the expense of movers, who have
                                                                                                                          dropped down to just 20% of purchases. That’s
                                                                                                                          lower than ever before.
                                                                                                                    33%

30%
        28%                                                                                                         27%
        27%
        27%

20%            First Home Buyer
               Mover                                                                                                20%
               Multiple Property Owner Cash
               Multiple Property Owner Mortgage
               New to Market
               ReEntry
               Other
 10%
        8%                                                                                                          9%

        4%                                                                                                          5%
        3%                                                                                                          4%
        3%                                                                                                          2%
  0%
                  2006           2008           2010           2012           2014           2016           2018

36 | CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019

© Copyright 2019. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest
(including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
Wellington Values
Average value of housing stock – Wellington ($)

                                                                                 The growth in property values around
                                                                                 Wellington region remains pretty strong across
                                                                                 the board. The largest gains are being seen in
                                                                                 Upper Hutt and Masterton (both 12.3% in the
                                                                                 year to March), followed by Carterton (11.6%).

                                                                                 The other parts of the region are all seeing
                                                                                 values rise by about the 7-9% range, with
                                                                                 Porirua towards the top, and Kapiti Coast and
                                                                                 South Wairarapa a little further back.

Annual and quarterly change in value – Wellington (%)

                                                                                March 2019
                                 Current value                 3 months                            12 months                          Since Peak
 Porirua                           $597,865                         1.1%                               8.9%                                 57%
 Upper Hutt                        $542,220                        2.9%                                12.3%                                54%
 Lower Hutt                        $576,086                        3.0%                                8.2%                                 47%
 Wellington City                   $828,645                         1.9%                                7.9%                                56%
 Carterton                         $425,136                         1.8%                               11.6%                                53%
 Kapiti Coast                      $586,842                         1.7%                               6.8%                                 53%
 Masterton                         $377,865                         1.2%                               12.3%                                32%
 South Wairarapa                   $514,326                        2.3%                                6.7%                                 52%

                                        CoreLogic Quarterly Property Market & Economic Update New Zealand Q1 2019 | 37

                                                 © Copyright 2019. CoreLogic and its licensors are the sole and exclusive owners of all rights, title and interest
                                                   (including intellectual property rights) the CoreLogic Data contained in this publication. All rights reserved.
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