Spring has sprung, but green shoots of growth remain scarce across New Zealand Aotearoa’s housing market – for the time being.
Our latest QV House Price Index shows the average home decreased in value nationally by 0.4% last month and by 1.6% in the September quarter – compared to a 0.5% monthly decline and a 2% quarterly decline in our August index. The national average is now $901,920, which is just 0.3% higher than the same time last year.
The latest data also shows that home values have continued to slowly level out across much of the country in the September quarter, with the average three-month rolling rate of reduction slowing in Auckland (-1.7%), Christchurch (-0.8%), Hamilton (-1.2%), Dunedin (-0.8%) and most of the other main urban areas we monitor around the country.
The most notable exception was Wellington, where home values have reduced at twice the national average rate. The Wellington region’s average home value has reduced by an average of 3.2% in the September quarter – a slightly higher rate of reduction than the 3% decline reported for the August quarter.
QV operations manager James Wilson commented: “Interest rates have started to come down now, so we’re really starting to see sentiment shift across much of the country. There seems to be a spreading expectation that interest rates can only go one way, and so we’re seeing more people at open homes, in auction rooms, and browsing for property online.
“And so it certainly seems like a general uplift in property values is now on the horizon, but despite growing confidence and optimism that we’re through the worst of it, the conditions aren’t yet conducive to growth. The cost of borrowing still remains relatively high, the cost of living is restrictive, and there are significant worries about job security – especially in Wellington.”
Mr Wilson said high levels of stock for sale on the market today were also having a dampening effect on prices. “Generally speaking, those who are in a position to purchase still have a raft of different options to choose from right now, especially within the main centres. So there isn’t so much pressure on prices currently, with more than enough houses for sale to meet the current level of demand.”
However, he expected that balance to slowly shift over the coming months – particularly if interest rates continue to fall. “All eyes will be on the Reserve Bank’s October announcement. If the Official Cash Rate drops again, as many are expecting it to, it will reinforce the growing perception that now is a decent time to become reacquainted with the property market. A larger cut, like what we saw recently in the US, will only reinforce it even more.”
“First-home buyers remain very much in the ascendancy right now, but we’re already starting to see more investors coming out of the woodwork. This will ramp up the level of competition in the housing market and help to absorb some of that excess stock. Values will inevitably tighten again when prospective buyers aren’t so spoilt for choice. That hasn’t happened yet,” Mr Wilson concluded.
Northland
Home values continue to decline across the wider Northland region at a quicker rate than the national average.
The average rate of decline slowed somewhat in Whangarei, where the average home value reduced by 2.1% in the September quarter to $714,322 – compared to a 2.6% reduction in the three months to the end of August.
Otherwise, the average home value decreased in the Far North by 7.3% to $673,508 this quarter, and by 8.6% to $793,395 in Kaipara. These figures remain highly volatile due to continued low sales volumes.
Auckland
Green shoots of home value growth remain rare across Tāmaki Makaurau, despite a notable shift in sentiment following recent interest rate cuts.
Of Auckland’s seven former local government areas, only Papakura (0.4%) experienced a small amount of home value growth on average this quarter. Otherwise, Franklin (-3.3%) saw the largest average decline and Rodney (-1.5%) saw the smallest.
However, the average rate of home value decline did slow across every Auckland district this quarter. Home values reduced by an average of 1.7% across the wider region – compared to a 2.8% decline average decline throughout the three months to the end of August.
The average value of a home in Auckland is now $1,228,955, which is 2.6% lower than the same time last year and now 4.4% lower than at the start of 2024.
Local QV registered valuer Hugh Robson commented: “There are increasing signs that a slow recovery is underway now across the Auckland region, with more developers, investors and buyers in general, all out there looking to buy.”
Tauranga
The average rate of home value decline has increased in Tauranga.
The city’s average home value reduced by 1% in the month of September – compared to a 0.4% reduction in August – with its three-month rolling rate of decline now sitting at 2.1%. This also compares to a 1.6% average decline nationally this quarter.
Tauranga’s average home value is now $1,005,282, which is still 0.3% higher than the same time last year.
Waikato
Modest patches of growth have emerged across Waikato’s residential property market.
After four consecutive months of decline, home values lifted slightly across the wider region by an average of 0.6% during the month of September, with almost every district recording minor amounts of growth.
Hamilton was the exception. Its average home value decreased by 0.3% to $772,473 in September. The average home here is now worth 0.5% less than the same time last year and 1.6% less than at the start of 2024.
Local QV property consultant Marshall Wu commented: “The regional market is mixed. Most of the larger districts – including Thames-Coromandel, Waikato, Matamata-Piako and Waipa – have experienced a quarterly decrease, whereas smaller districts like Hauraki, Otorohanga, and Waitomo are displaying signs of recovery.”
“The outlook for the housing market remains intertwined with the trajectory of interest rates, economic growth and labour market conditions. Although market activity has increased since the start of spring, overall trends indicate a flat to slightly declining housing market. The high volume of properties currently for sale has strengthened buyers’ positions, leading to extended selling times for vendors, declining asking prices, and lower auction clearance rates,” Mr Wu said.
“First-time home buyers are benefiting from this environment, adopting a ‘wait and see’ approach ahead of the OCR announcement in October,” he added.
Taranaki
There were some very small pockets of growth across the Taranaki region last month but the market remains largely flat overall.
Average home values in New Plymouth (0.4%) and Stratford (0.8%) increased in September, but reduced by 1.6% in neighbouring in South Taranaki.
Home values remain 0.4% lower on average across the region for the quarter but 1.2% higher than at the same time last year.
Hawke’s Bay
There is little home value growth to speak of in the Hawke’s Bay.
Residential property values in Napier ($729,034) and Hastings ($774,635) reduced by 4.2% and 1.8% respectively this quarter – though the latter did record a modest amount (0.7%) of positive home value growth during the month of September itself.
Once again, only Central Hawke’s Bay managed to buck the trend this quarter, with its average home value increasing by 2.6% to $587,346 throughout the three months to the end of September.
Palmerston North
Property values remain relatively steady in Palmerston North.
The latest QV House Price Index shows the city’s average value decreased by 1.3% to $628,981 in the September quarter – just slightly worse than the 0.8% decline recorded in the August quarter – but that figure is still 0.3% higher on average than at the same time last year.
Local QV registered valuer Olivia Betts commented: “The real estate market typically picks up when spring begins. However, affordability concerns remain, with many potential buyers facing challenges due to higher interest rates. Although these have dropped in recent times, further drops are required to relive this price pressure.”
“We’re continuing to see a slight weakening of the centre point of the market, but there has been some solid interest around the mid-$500,000 price bracket from first-home buyers looking for anything modernised in the last 20 years. Properties with older, outdated features are struggling to attract buyers and are often having to sit on the market for extended periods of time,” she added.
Wairarapa
The latest housing data continues to be volatile in some areas of the country due to low sales volumes.
The average home value in Carterton has reduced by 6.9% to $588,340 in the September quarter – well down on the 0.7% decline QV recorded for the August quarter – with Masterton’s average value also reducing by 4.6% to $569,813.
South Wairarapa recorded a much more modest 1.3% reduction this quarter. Its average home value is now $750,126.
Wellington
Home values in Wellington have reduced at twice the average rate nationally.
Our latest QV House Price Index shows the region’s average home value decreased by 3.2% to $837,878 throughout the September 2024 quarter – compared to a 3% average decline in the three months to the end of August and a national average quarterly decline of 1.6%.
During the month of September, home values reduced by an average of 0.9% across the wider region – compared to a 1.3% average decline in August and a national average monthly decline of 0.4%.
Breaking it down by district, Kapiti Coast and Hutt City both experienced the largest average home value declines this quarter at 3.6%. Upper Hutt recorded the smallest average quarterly decline at 1.5%, with Wellington City (-3.2%) and Porirua (-2%) sitting in between those three.
“Home loan serviceability, job sector uncertainty and the general cost of living are all having an impact on existing homeowners and prospective buyers,” said local QV registered valuer Jack Whiteman.
“Despite having the advantage of choice and competitive pricing, buyers are having to take a cautious approach to the market. Given the current economic circumstances and uncertainty about job security following some public sector redundancies earlier in the year, only those with secure employment are willing to take on debt at this time. This is resulting in a relatively quiet property market.”
Nelson
The property market remains relatively flat throughout the Tasman region.
Our latest QV House Price Index shows Nelson’s average home value increased by 0.6% to $776,415 throughout the September 2024 quarter – compared to an even smaller 0.3% average increase in the three months to the end of August.
In Tasman District, the average home value remained almost completely static this quarter – increasing by just 0.1% to $818,215. Meanwhile, the average home value in Marlborough reduced by 1.4% to $701,622.
QV Nelson/Marlborough manager Craig Russell said sales volumes remained low throughout the region with properties taking an extended period to sell.
“There is greater market activity at the lower end of the market, where a combination of first-home buyers and owner-occupiers are active. But properties that are situated in locations that have been deemed high risk are being discounted by purchasers, which is in part due to the uncertainty that these properties have obtaining insurance now and into the future.”
West Coast
Home values have done little more than break even across the wider West Coast region this quarter.
The average home value across the wider region increased by 0.3% in the three months to the end of September. Westland (2.5%) and Grey (1.2%) performed above average, while home values in Buller (-3.2%) experienced a small loss on average this quarter.
The average home value is $346,295 in Buller, $428,762 in Grey, and $452,068 in Westland.
Canterbury
Home values remain almost as flat as the Canterbury Plains.
Our latest QV House Price Index shows the average home value across the wider Canterbury region decreased by just 0.7% throughout the three months to the end of September 2024 – compared to average decreases of 1.1% and 0.7% in the August and July quarters respectively.
Waimakariri experienced an average quarterly decline of 0.9%, with home values in Selwyn and Hurunui holding up slightly better this quarter with average deficits of just 0.3% and 0.4% respectively.
In Christchurch, the average home value reduced by 0.8% this quarter, including by 0.4% during the month of September itself.
QV senior consultant Olivia Brownie commented: “The latest QV House Price Index has seen a little sales slump for Christchurch, with an increase of spring listings tipping the equilibrium slightly to a minor decrease in home values.”
“With interest rates easing and some increase in spring activity, we may see the Canterbury market have a further slowdown in home value decline, if not some positive movement over the next few months. However, this is all offset by a sizable supply of new builds and stock available, and still some economic uncertainty in some business sectors across the Canterbury region.”
Otago
Home values all-but broke even in Dunedin last month.
The city’s average home value decreased by 0.8% this quarter, including by only 0.1% in September. At $638,297, the average home is now worth 4.6% more than at the same time last year and 1.8% more than at the start of 2024.
“Dunedin’s number of properties listed for sale appears to have jumped back up after four months of decline, with the average number of days to sell still remaining high. So it’s still obviously a buyers’ market,” said local QV registered valuer Rebecca Johnston.
“Though vacant land sales remain slow compared to the market’s peak at the end of 2021, they have increased across the city compared to 2022 and early 2023, indicating more positive sentiment for new builds/developments. Well located properties – including in new subdivisions on the Taieri, on the coast, and in Residential 2 and Inner City Residential zoned properties – have the greatest demand.”
Meanwhile, the average home value increased by 0.5% across the wider Otago region this quarter. Only Dunedin and Central Otago (-0.9%) recorded small average home value deficits, with values increasing marginally in all the other districts.
Queenstown
Home values remain flat to gently rising in Queenstown.
The latest QV House Price Index shows its average home value lifted by 1% in the September quarter to $1,846,833. That is twice as much growth as in the three months to the end of August 2024.
The average home in Queenstown is now worth 7% more than the same time last year. This compares to an average annual increase of just 0.3% nationally.
Invercargill
Residential property values grew by an average of 1.2% last month in Invercargill.
The city’s average home value is $486,639, which is now 4% higher than the same time last year.
Local QV registered valuer Andrew Ronald commented: “Market conditions remain flat across all price brackets. There is still steady demand from first-home buyers, and investors are beginning to return to the market with the restoration of interest tax deductibility rules.”
“However, continued high interest rates appear to be limiting price growth,” he added.