Another surge in building activity in Tauranga and Auckland may have a dampening effect on those regions in the near future, although they should continue to be among the fastest growing regions in the long term.
In ASB Bank's latest quarterly housing survey, economist Rozanna Wozniak said that excess supply has already affected the housing markets in Tauranga and Auckland in the past year to 18 months. The number of dwelling consents issued in Auckland for the three months to October was more than double than in the same period last year - she said the effect on house prices would depend on whether this trend continued and for how long.
Meanwhile, further down the North Island, the Capital showed up as the least confident region during the period surveyed.
Wozniak said the rapid growth in Wellington house prices could be dampening confidence. However, at least for the time being, a stronger national economy and continued buoyancy in the regional economy should provide support for the city's housing market.
"However, Wellingtonians should be cautious about relying on the short-term capital gains the city's residential property market has enjoyed in recent years."
Housing trends: quarterly percentage change in Quotable Value New Zealand's house price index
| | June qtr 1998 | Sept qtr 1998 | Dec qtr 1998 | Mar qtr 1999 | June qtr 1999 | Sept qtr 1999 | | ---------------------- | ------------- | ------------- | ------------ | ------------ | ------------- | ------------- | | Auckland urban | -3.8 | -1.7 | 2.9 | 1.6 | 0.5 | n.a. | | Wellington area | -1.4 | -0.4 | 2.9 | 3.2 | 1.5 | 1.6 | | Hamilton City | -2.4 | -3.3 | 1.4 | -0.4 | 0.1 | 0.6 | | Christchurch City | -3.0 | -1.1 | 0.3 | 1.4 | 0.4 | 0.5 | | NZ, 1/4ly %age change | -2.9 | -1.7 | 2.0 | 1.6 | 0.6 | 0.0* | | NZ, annual %age change | -1.8 | -4.1 | -3.6 | -1.0 | 2.5 | 4.2* |
- data excludes Auckland urban area, which was not available
Source: Quotable Value NZ (QV), used in the ASB Bank October 1999 quarterly housing survey. All QV data is provisional
