Property values are slightly higher on average across the country for the first time in nearly two years, according to a recently released report.
This comes despite the rate of home value growth largely flattening across New Zealand’s main urban centres this quarter in the QV House Price Index.
The average home value increased by 1.3% nationally this quarter, compared with 2% growth in the previous quarter.
The national average home value is now 0.6% higher than the same time last year and 13% below the market’s peak in late 2021.
QV operations manager James Wilson said this small but significant return to positive year-on-year growth indicated a reversal of value softening at a national level.
“However, the slow but steady growth that we have been experiencing since June last year now appears to be flattening even further.”
Just three of the main urban areas experienced more positive home value growth this quarter than last — Tauranga (3.1%), Nelson (1.2%) and Marlborough (3.1%).
Auckland’s three-month rolling average just dipped into the negative (0.1%) for the first time since last August.
Three of Auckland’s seven former territorial authorities experienced a downturn in average home value — Waitakere (-0.5%), Papakura (-1.7%), and Franklin (-1.3%) — up from just one in the previous index.
QV registered valuer Hugh Robson said some bumps were to be expected as the market recovered from the 2022 downturn.
“This is continuing to impact on first-home buyers in particular, who have been the most active participants in the market to this point.
“Many owner-occupiers who want to upgrade to bigger or better properties appear to still be hesitant – as are investors, despite rents continuing to rise.”
Values in New Zealand’s second and third largest cities, Christchurch and Wellington, also increased at reduced rates of 2.4% and 2.5% respectively.
Wilson said the flattening trend was being largely driven by diminishing demand, a trend expected to continue over the next few months.
“In some areas, it appears that the increase in the number of new listings that came onto the market in late January and in February appears to have met market demand, cooling competition in places like Auckland in particular, and therefore flattening home value growth.”
Strong value declines were unlikely, he said, even in the face of a likely reduction in sales over autumn and winter.
“But with such strong economic headwinds in place, we’re also unable to pinpoint anything that would spark a return to strong value growth over the next 3-6 months.”
The Reserve Bank decision to maintain the Official Cash Rate meant that short-term mortgage rates would remain broadly as they were for the foreseeable future.
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