Property values across many New Zealand suburbs are weakening after initially rising at the start of the year, with a "clear slowdown" emerging in the past several months, according to CoreLogic.
Recent quarterly data shows sharper declines recorded in Auckland, as well as cities such as Napier, Wellington and Nelson, but with an overall "mixed picture" across the country.
Around half of suburbs experienced "meaningful" value increases over the past year, according to analysis carried out by CoreLogic. Out of 951 suburbs covered in the update, 480 saw median property values rise by at least 1% since September 2023.
But the firm's chief property economist Kelvin Davidson said several distinct "phases" had emerged to describe what had happened in the property market.
"The past 12 months is made up of two distinct phases: a period of recovery in late 2023 and early 2024, followed by a recent downturn over the past three months."
Since June, 674 suburbs have seen property values decline, which is 71% of the total, with 175 of those dropping by at least 2%.
In Auckland, 183 of 200 suburbs recorded drops in value over the same period, with East Tāmaki, Northpark, and Somerville all recording falls of more than 6%.
Davidson said: "Over the past 12 months, we've seen a mixed picture in the market.
"While around half of the suburbs analysed have experienced value gains over that period, recent months have seen a shift in momentum.
"Rising affordability pressures, increased listings, and growing job insecurity have led to a more cautious buyer environment, resulting in falling values across other areas."
Double-digit gains were recorded in eight suburbs in the year to September, led by the top increase of 22.6% to a median value of $313,000 in Cobden and 15.9% to $333,750 in Blaketown, both in Grey District.
Davidson said the "best-performing suburbs" were generally at the more affordable end of the market, with five of the eight maintaining a median value of less than $500,000.
Outliers included the popular South Island town of Arrowtown, where the median value of $2.45 million makes it the fifth most expensive suburb across the country.
"Markets such as Arrowtown and the wider Queenstown market are sought-after lifestyle areas, they hold broad appeal among tourists, second homeowners and owner occupiers which has made them more resilient despite the broader affordability pressures,” he said.
'Subdued' market into 2025 - CoreLogic
The CoreLogic economist doesn't expect to see a "swift" rebound in property values, after the most recent quarter's declines, with further softening expected in the coming months.
"While lower mortgage rates will ease pressure on some buyers, affordability remains a major hurdle, and job insecurity is starting to hold back demand," he said.
"Stock levels are at multi-year highs, giving buyers more leverage, but access to finance remains tricky, limiting how many can take advantage of the current conditions."
Looking ahead, Davidson expects the market to remain subdued into next year.
"The tailwinds of lower rates may prevent a sharp decline, but we're unlikely to see strong price growth in the near term," he said.
"This may mean vendors who do not have to sell stay put until market conditions improve, while those looking to buy or invest could face delays unless they have the financial backing to negotiate in a competitive lending environment."
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