Kelvin Davidson: Corelogic Chief Property Economist on the downwards trend in the property market

Auckland looks to be leading the pack in the downwards property market. 

CoreLogic's latest House Price Index reveals property prices have dipped 0.2% around the country in May. 

Auckland dropped a notable 0.8% on the back of a 0.6% fall in April. 

Chief Property Economist Kelvin Davidson says it's pretty striking to see our largest city having a weakness in prices. 

He says Auckland has gone backwards in the past two months and that's something to keep an eye on. 

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Episode Transcript

Speaker 1 (00:00):
Let's have a look at housing. We've got new intel
into where our housing market is this morning call Logic.
Home value growth dipped by zero point two percent in May.
That was after the zero point one percent fall in April.
So is that a trend? Brings the average property value
across the country to a bit over nine hundred and
thirty one thousand, still eleven percent below the peak. Core
Logic's chief property economist Kelvin Davidson back with this, Calvin,
very good morning to you. Good morning, although it is

(00:21):
up one percent on a year ago. So if we've
seen a lift that's now stalling, Yeah, I.

Speaker 2 (00:26):
Think that's pretty much the way to sum it up.
I don't think we've entered a new downturn, but certainly
the momentum that we had satal in the last year,
in the first few months of this year has gone
And so yeah, they have a kind of a mindset shift.

Speaker 1 (00:38):
Going on the home And I think, and how much
weight do you place on a month versus a quarter
versus a year.

Speaker 2 (00:44):
Oh well, I'm going to sound like an economist here.
It probably depends a little bit. I mean, I think
probably you want to look over three or four or
five months. Really, it's tricky. You're dangerous through looking at
just one month on its own. So I'm just just saying,
not not a trend yet terms of a new downturn, but
certainly that momentum has gone, and it's consistent with high
mortgage trades, lots of listening, so that those kinds of

(01:06):
things which are subsuring prices.

Speaker 1 (01:07):
And how do we explain say a place like Auckland
which is down zero point eight on the month, but
we've got all this immigration, we haven't got enough houses,
et cetera. How do we explain that?

Speaker 2 (01:17):
Yeah, Well, I think there's there's a few things there.
I mean a lot of the migrations going to the
rental sectors. So we are still seeing rental pressure in Auckland,
but in terms of house prices, there's lots of choice
out there for buyers listening to risen no more. We
try to still a challenge for affordability as always in
au in Auckland. And also there's a lot of new
property market in terms of net builds that all those
townhouses being built. So yeah, that some of those factors

(01:40):
are prevalent elsewhere too, but they are showing up in Auckland,
so certainly one to watch.

Speaker 1 (01:45):
And would you have said that first time grant staff
the DCI, which isn't here yet but will be, has
that stuff worked its way in yet or not?

Speaker 2 (01:53):
Well, I mean it's early days for those things, and
to be fair, I'm not sure they will have much
in an impact anyway. I mean first time grants were
a nice little top up. I don't think it was
the main thing for a lot of buyers, So I
suspect your time buyers will carry on. BCI is probably
not going to do anything to trade away anyway because
rbit rates are the factor there. So so I think
a lot of those changes are going to be sealing neutral.

(02:14):
WELVR rules are loosen that that might sound positive, but
of course if you put in a low deposit and
mortgage high orbitrates. So I think mortgage rates are still
the challenge.

Speaker 1 (02:24):
And the good news out of it. Christian Hamilton's needing
up what do we what do we put it down to?

Speaker 2 (02:29):
Yeah, I think that's that's a patching just going on
at the moment. So you are seeing variability and it's
just symptomatic of the high mortgite rates. Again, lots of
listings out there. Some markets are up in one month
and down the next month. I think that's why it's
a little bit dangerous to read too much into this.
I think people sort of if anyone's out there jumping
up and down about a new downturn, I think that's

(02:51):
probably premature, but certain in the momentum has just faded
out a little bit in the past couple of months.

Speaker 1 (02:56):
Good stuff Kelvin appreciated very much. Kelvin Davidson called Lodge.
You can't remember which bank was, I think it was
wes pat could havebin the being said materially altered their
forecast for the rest of the year. They had us
up at five percent calendar year, and they've done and
that seems to dovetail in with with what's unfolded in
those particular numbers. For more from The Mic Asking Breakfast,
listen live to News Talks at b from six am weekdays,

(03:18):
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