New Zealand slipping down the rankings of global property price inflation

by Alistair Helm in ,


This may well be the kind of news that we will all may be a little bit pleased to see. For once NZ and especially Auckland are not at the top of the global leaderboard by property price inflation. The Reserve Bank and government officials, I am sure will be somewhat heartened.

This ranking is provided by Knight Frank, one of the global leaders in real estate and their international research department are providers of valuable comparisons of residential and commercial property data around the world.


NZ ranked 27th out of 56 countries in 3rd quarter 2017 Global House price index

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Full report can be downloaded here

At a 5.2% year-on-year house price index inflation the Knight Frank team now assess NZ as heading downwards and place it at 27th place of the 56 countries ranked in the survey. Our neighbour Australia is considerably higher placed at 7th with an annual rate of house inflation of 10.2%.

Tracking the past 5 years in the chart below comparing NZ median price by quarter against Global House Index shows the extent to which the NZ market ran ahead of global index through the past 2 years. It also shows to what extent that the market has come off the boil in the past 9 months, although the final quarter of 2017 is showing a rise. Note: The NZ data in this chart represent the REINZ median price data showing a 4% year-on-year inflation in Q3 2017 vs Knight Frank's at 5.2%.


Auckland ranked 98th out of 150 global cities in 3rd quarter 2017 Knight Frank Global Residential Cities Index

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Full report can be downloaded here

At a 2.7% year-on-year house price index inflation the Knight Frank team now assess Auckland in the bottom third of global cities. Interestingly in the top 20 appears Wellington with a 10.7% annual inflation in 19th place. Our neighbouring cities in Australia see Melbourne at 10th place with a rate of 13.2% and Sydney in 26th place with 9.4%.

Tracking the past 5 years in the chart below comparing Auckland median quarterly price vs Global Index shows the significant inflation ahead of the global index of all 150 cities right up until Q1 2017, the significant decline in property price inflation since then demonstrates how much the Auckland property market has come off the boil in the past 9 months. The comparison of median price as reported by REINZ for the 3rd & 4th quarter year-on-year shows declines. Note: The NZ data in this chart represent the REINZ median price data showing a -0.3% year-on-year inflation in Q3 2017 vs Knight Frank's at 2.7%.


In addition to these two rankings tables Knight Frank has also released a comprehensive report on Global Cities. Auckland is featured as a case study in the report with the following excerpt from Rachel McElwee, Head of Research, Knight Frank New Zealand detailing the developments on the Wynard Quarter and the impact this has on the city.

Auckland: Blurring the lines

"Mixed-use development is reshaping Auckland’s central city, blurring the lines between work and living environments. The largest urban regeneration project currently underway in New Zealand, Wynyard Quarter, is transforming the former industrial port into a mix of residential, retail, leisure, hotel and office space. New types of purpose built spaces will be created such as the innovation hub, housing a campus-style precinct fostering creativity, technology and originality for start-up companies. A diverse range of tenants include the Auckland Theatre Company, financial firm ASB, architects Warren and Mahoney, the Hyatt Hotel Group, and multinational dairy co-operative Fonterra. When completed in 2030, Wynyard Quarter will house approximately 3,000 residents and 25,000 workers. The redevelopment covers 37 hectares of land and stretches three kilometres along the coast. Investment backing for the project came from off-shore, private investment, third sector and government sources. The waterfront could be further transformed if Auckland stages the next America’s Cup in four years’ time".