The housing market continues to strengthen into the festive season – but a slow recovery throughout 2024 is expected.
The national average home value is now precisely 3.3% lower than at the start of 2023, compared to an average reduction of 10.2% from 1 January to 30 November 2022, an average 25.5% increase over the same period in 2021, and 10.8% growth in 2020.
The latest QV House Price Index shows the average home increased in value by 2.3% over the three months to the end of November – a small rise on the 2.1% quarterly home value increase reported at the end of October – with the national average now sitting at $914,017. It follows four consecutive months of modest growth, including 0.7% last month.
Quotable Value (QV) operations manager James Wilson commented: “The residential property market has been a rollercoaster ride since Covid-19 first reared its ugly head on these shores, with more ups and downs than the entire decade prior. This year, home values continued to fall for the most part, stabilised, and now appear to be slowly beginning to strengthen once again.
“But rather than the start of another major uplift in values, I expect we’ll see a return to a more ‘typical’ sort of housing market in the year ahead, with slow growth, and days to sell and listing numbers eventually returning to historic norms. This is not a bad thing given some of the economic challenges we all continue to face together as a country.”
“High interest rates currently have a stranglehold on the market and the economy as a whole, which won’t alleviate any time soon judging by the Reserve Bank’s most recent announcement. This is going to continue to put a damper on things next year, as it’s been designed to,” Mr Wilson added.
Just three of the 16 main urban centres QV monitors have recorded net-positive home value growth so far this calendar year – Rotorua (3.2%), Queenstown (2.1%) and Invercargill (1.5%) – with Christchurch (-1.2%), Hastings (-1.3%), and Palmerston North (-1.4%) tracking relatively closely behind. Whangarei (-7.4%) and Tauranga (-6.3%) have recorded the largest reductions in 2023.
However, just two urban centres have recorded modest home value reductions in the most recent quarter – Tauranga (-0.1%) and Marlborough (-0.3%) – with home values continuing to grow at a steady rate in Wellington (3.2%) despite increasing uncertainty around job security within the public sector.
“It’s really tough out there and it could get tougher. It’s just a slow but steady recovery at this stage. With the summer selling season now firmly underway, we’re seeing a small uptick in activity and listings. Increased immigration into New Zealand is also helping to fuel demand and placing increasing pressure on an already extremely tight rental market,” Mr Wilson said.
“First-home buyers continue to be the most active group in the housing market today, but it will be interesting to see if significant numbers of investors do return to the market in the first half of 2024, given the new government’s policy settings. They’ll be hamstrung by affordability constraints just like everyone else, as the mortgage pain looks set to continue in 2024.”
Download a high resolution version of the latest QV value map here.
Northland
Home values went up by an average of 1.7% this quarter in Northland.
The average value increased 1.5% to $695,023 in the Far North District, and by 1.1% to $732,083 in Whangarei. In Kaipara, values increased by a robust 4.4% to reach a new average of $845,887.
However, values are still 6.2% lower on average across the wider region than they were at the start of this calendar year.
Auckland
It has been a mixed year for the Super City’s residential property market.
Auckland’s average home value increased by 0.8% to $1,287,201 in November, which marked its fifth consecutive month of growth. However, values remain 3.9% lower on average than at the start of this calendar year.
All of Auckland’s seven former territorial authorities were in the red this quarter, with Papakura and Auckland City leading the way on 3.6% and 3% respectively. Rodney recorded the smallest amount of growth on average at just 1.2% throughout the three months to the end of November.
“The Auckland residential market continued its recovery during November, with the average home value rising 0.8%,” QV registered valuer Hugh Robson said. “While this is not a huge amount, it is proving to be a steady recovery at this stage.”
“Sales volumes have increased over the past 4-6 weeks, but again just steadily. The number of listings has increased as well − particularly on the North Shore − with agents reporting an increased level of enquiry and more people at open homes and auctions.”
However, he said high interest rates remained a concern, with many prospective purchasers having to wait for them to decline. “There has been some increased enquiry from investors, but many are waiting for interest deductibility rules to change,” he added.
Tauranga
Home values have fallen by an average of 6.3% so far this year in Tauranga.
The city’s average home value also reduced by 0.1% to $1,008,788 in the November quarter, after having previously experienced growth of 1.1% in the October quarter.
QV registered valuer Meghan Crowe commented: “Local real estate agents are reporting more properties coming to the market, with listing activity increasing in most areas across Tauranga in November compared to October, and the sales count also lifting slightly.”
“The market has been impacted over 2023 by a wide range of factors, including inflation and interest rate increases, adverse weather conditions, and overseas events. But Tauranga’s population is continuing to grow, which brings with it demand for new housing. This trend is likely to continue through 2024.”
Waikato
The residential property market has experienced an up-and-down year in the Waikato.
Home values have increased by an average of 1% this quarter across the wider Waikato region, but remain 4.6% lower than at the start of the 2023 calendar year. The largest reductions this year have occurred in Thames-Coromandel (-10.1%) and Waitomo (-7.8%).
In Hamilton, the average home value is now 4.5% less than it was at the start of the year, despite modest growth of 1.2% for the quarter. The average home value is now $782,799.
QV property consultant Marshall Wu commented: “The housing market started this year where it left off in 2022. In time, the overall decrease in values became less significant, and now it looks like this downturn has reached a turning point. The cash rate stands out as a crucial factor contributing to the noticeable easing in value falls, as it may now be approaching a ceiling.
“With the warmer weather now upon us, we’re seeing a clear increase in listings and a growing consensus amongst purchasers adjusting to a higher borrowing cost market. Increasing international migration and demand for housing is continuing to put a floor under housing prices.”
“An expected increase in the flow of new listings coming onto the market in coming months will put that demand to the test amid further uncertainty around interest rates,” Mr Wu added.
Rotorua
Home values in Rotorua continue to fluctuate as a result of low sales volumes.
The latest QV figures show the city’s average home values increased by 9.5% this quarter. It follows a modest reduction in the September quarter, and modest growth in the October quarter.
The average home value in Rotorua is now $692,672, which is now 1.8% more than it was 12 months ago and 3.2% higher than at the start of 2023.
Taranaki
Residential property values are up across the Taranaki region this quarter.
The latest QV House Price Index shows New Plymouth’s average home value increased by 0.8% to $712,191 throughout the three months to the end of November.
Meanwhile, the average home value climbed 1.7% to $484,294 in Stratford, and by 4% to $445,427 in South Taranaki District.
Hawke’s Bay
The residential property market appears to be warming up in Napier and Hastings.
Home values in Napier and Hastings have increased by an average of 3% and 4.5% respectively this quarter, up from quarterly increases of 1.7% and 2.4% in the previous QV House Price Index.
However, the average home value in Napier is still 4.8% less than at the start of the year, and 1.3% less than at the start of the year in Hastings.
QV Hawke’s Bay manager Damian Hall commented: “The market in Hawke’s Bay is showing signs of improvement with all four council areas now showing positive growth over the past month, and the main centres of Napier and Hastings showing improvement over the past 3-6 months.
“Different sectors of the market are showing varying tr
