The housing market’s slow but steady recovery continues, with all bar one of Aotearoa New Zealand’s main centres recording an average rise in home value this quarter.
The latest QV House Price Index for January 2024 shows the average home increased in value nationally by 2% this quarter to $925,461, representing a faster rate of growth than in the three months to the end of December, but still slightly slower than in October and November. The national average value is now just 1% less than at the same time last year.
Only Invercargill (-0.6%) posted a small average home value reduction this quarter, following six consecutive months of growth. Otherwise 10 of the 16 main urban areas we monitor recorded more growth in this index than in the last one, with Queenstown (4.4%), Christchurch (3.4%), and Dunedin (3.1%) experiencing the largest gains on average this quarter.
QV operations manager James Wilson said the housing data continued to be volatile in some areas of the country where a relatively low number of sales had still been occurring. “It doesn’t take much change in activity to increase or decrease the value performance of some of our less populous regions, but the overall trend is the housing market is slowly but surely strengthening.”
“Over the last few months there’s been a pretty major shift in mindset. Many prospective buyers are now thinking that things can only get a bit better this year when interest rates eventually reduce and interest deductibility is reintroduced for investors, so they’ve been cautiously returning to the market in slowly increasing numbers, trying to get ahead of any further price rises,” Mr Wilson said.
He said widespread predictions of a possible drop in shorter term mortgage rates later in the year and only a small recent rise in unemployment would likely reinforce this perception. “You can’t underestimate how powerful a shift in the prevailing mindset can be. Confidence is rising, even as financial and economic pressures are continuing as they have been for some time.”
“After a brief stalling in home value growth over the holiday period, it looks increasingly likely that residential property values in New Zealand will broadly continue to follow the same trend they left off in October and November last year, with slow but steady growth overall, as well as a likely uptick in activity throughout February and into March.”
“Outside of our largest cities, I expect that we’ll still see some fluctuations from month to month, with patchy, often variable growth – especially where continued high immigration is less of a factor and activity is low – but once again the overall picture is of a slowly strengthening housing market,” Mr Wilson concluded.
Download a high resolution version of the latest QV value map here.
Northland
Home value growth has remained relatively steady across the wider Northland region.
The latest QV House Price Index shows the region’s average home value increased by 2.7% to $741,535 in the three months to the end of January 2024. It’s a small increase in our rolling three-month average from 2.3% at the end of December.
At the district level, the average home value in the Far North increased by 4% to $706,200. Whangarei experienced half as much growth at 2% for the quarter – the average home value is now $738,671 – and Kaipara wasn’t far behind with the average home increasing by 2.2% to $851,686.
Auckland
Auckland’s residential property market continues to slowly strengthen.
The average home value has increased by 1.1% to $1,291,387 throughout the January quarter – down on the 1.9% quarterly growth recorded back in December. The largest gains have occurred on the North Shore (2.7%) and in Manukau (2.1%).
The Super City’s average home value is still 2.2% lower than the same time last year.
Local QV registered valuer Hugh Robson commented: “Sales volumes and home value growth is somewhat down on the November and pre-Christmas period, as is typically the case at this time of year, but the market remains buoyant and its slow-but-steady recovery is ongoing.
“We should see a steady increase in activity throughout February and March. In the meantime, well located and tidy homes are continuing to attract strong interest.”
Tauranga
Tauranga’s average rate of home value growth has slowed this quarter.
The city’s average home value increased by 2.2% to $1,028,042 in the January quarter, down from the 3.3% growth reported for the December quarter. The average value is still 2.5% less than the same time last year.
Local QV registered valuer Meghan Crowe commented: “The start of the year has started off slower than expected. However, it’s still being predicted that we’ll see an uptick in sales volume and values over the next 6-12 months, if interest rates lower.”
Waikato
Home values continue to slowly build back up in Hamilton.
The city’s average residential property value increased by 1.8% to $789,770 – a slight increase from the 1.1% quarterly growth reported in our previous QV House Price Index – but remains 2.2% less than at the same time last year.
Local QV property consultant Marshall Wu commented: “The housing market has started the year with a similar trend to where it left off in 2023, with values generally trending higher and recovering from the downturn. Despite ongoing cost of living pressures, high-interest rates, low consumer sentiment, and affordability constraints, homes are still selling.”
“Housing demand has been increased by high migration. The tight rental market has likely incentivised renters to transition towards homeownership if they can afford it,” he added.
Meanwhile, the regional market has also continued to strengthen on average this quarter – most notably in Waikato District (3.2%) and in South Waikato (2.8%).
Taranaki
Home values have risen across the Taranaki region this quarter.
The largest quarterly increase was in New Plymouth, where the average home value increased by 2.6% to $715,862. But South Taranaki and Stratford weren’t far behind, with values also increasing by averages of 2.1% and 1.4% respectively since the end of October.
Hawke’s Bay
Both Napier and Hastings have kicked off 2024 with a small amount of home value growth.
Napier’s average home value increased by 0.9% in January and 1.9% this quarter to reach $760,471. That figure is 2.1% less than the same time last year.
Hasting’s average home value also increased by 0.5% in January and 2.5% this quarter to reach $796,561. That figure is 0.6% higher than the same time last year.
Palmerston North
Home values continue to gently rise in Palmerston North.
Residential property values have risen across the city by an average of 1.5% this quarter – down on the 2.4% quarterly growth reported in our previous QV House Price Index – with the average home value now sitting at precisely $645,273.
Local QV registered valuer Olivia Betts commented: “The overall statistics have continued to show a steady upward movement pattern since mid-2023. This has come after a significant drop in house prices. Over the past 12 months we are also now seeing a slight increase.”
“Interest rates have been more stable over the last three to six months, which provides a level of assurance to purchasers. Affordability is still a significant concern though,” she added.
Wellington
The Wellington region continues to experience relatively steady home value growth, with one exception this quarter.
The average home value increased across the wider region by 2.8% throughout the three months to the end of January 2024, with all local districts bar Porirua (-0.2%) recording upward growth. Hutt City and Kapiti Coast recorded the largest quarterly home value gains on average at 3.8% and 3.5% respectively.
Local QV registered valuer Blake Ngarimu said the average home value across the region was now just 0.2% lower than at the same time last year.
“The market is still currently dominated by first-home buyers trying to get into the market before values increase any further, which means they are having to take on higher interest rates in the meantime. Listings have also significantly increased across the region, which is also likely to put a damper on major value growth, with prospective buyers having more options to choose from.”
“Though interest rates appear to have peaked, we’re unlikely to see any major home value increase until interest rates start to ease, which is speculated to be towards the end of 2024,” Mr Ngarimu added.
Nelson
Nelson recorded a modest increase in average home value this quarter.
The city’s average home value increased by 0.4% in the January quarter – down from the 1.5% quarterly home value growth recorded in the previous QV House Price Index – with the average value now sitting at $774,435. That figure is now 3.4% lower than at the same time last year.
QV Nelson/Marlborough manager Craig Russell commented: “We are seeing a continuation from the trend that emerged near the end of last year, with the market stabilising and increasing market optimism. Open homes continue to attract good numbers – particularly for properties under the $800,000 mark – but interest rates continue to be a major barrier for many purchasers.”
West Coast
Home values continue to strengthen at a relatively rapid rate on the West Coast.
There continues to be heightened volatility in the local QV House Price Index data due to relatively low sales volumes, with the average value of a home in Grey District increasing by 7.4% throughout the January quarter to $410,715.
In nearby Buller ($353,584) and Westland ($433,305), the quarterly rate of home value growth has been slower at 4.3% and 3.3% respectively, but this is still well above the national average of 2% growth for the quarter.
Canterbury
Value levels have increased across much of the Canterbury region.
The QV House Price Index shows residential property values have increased across the overall Canterbury region by 1.9% for the 12 months ending January 2024. This is an increase from the 0.2% growth shown for the 12-month period ending December 2023.
January’s quarterly figures show the region’s average home value increased by 2.9%. This is a small increase on the 2.3% growth recorded in the previous index, with all districts experiencing positive growth, except Mackenzie.
In Christchurch, the average home value increase was 3.4% this quarter, which is a sizeable increase on the 2.5% quarterly growth reported in the previous QV index. The average home value is now $765,104, which is 2.1% higher than the same time last year.
The wider Christchurch region also experienced positive growth this quarter, with the average value in the Waimakariri and Selwyn districts increasing by 1.6% to $711,750 and 2% to $838,606 respectively.
Local QV registered valuer Rod Thornton commented: “With regards to Christchurch and surrounding districts the latest quarterly index figures are positive and reflect the latter months of 2023, when we saw a general trend of increased buyer interest and value increases following a slowdown of the market and easing of values around late 2022 and early 2023.”
“What the next few months will bring is unknown. However, the market since Christmas still appears to be in a positive mode despite higher interest rates and cost of living concerns still being present.”
Otago
Dunedin’s average home value has increased for the fifth straight month.
The latest QV House Price Index shows the value of the average home in the city increased by 3.1% to $633,474 this quarter, including by 1% in January. The average home value is now just 0.9% lower than at the same time last year.
Home value levels have also increased across the wider Otago region by an average of 3.9% for the January quarter – a small increase on the 3.3% quarterly growth reported back in December. Just Dunedin is showing negative growth on an annual basis, with Waitaki (1.8%), Central Otago (4.2%), and Clutha (1.5%) all in the black.
Local QV registered valuer Rebecca Johnston commented: “Local real estate agents have noted that people are looking to relocate to areas such as Taieri Mouth due to its desirability and coastal appeal. The smaller provincial towns have seen less interest – although there is a current shortage of rental accommodation due to seasonal work and fixed term rental agreements.”
“Demand has continued to be strong in the Catlins Coastal areas and smaller coastal settlements east of Milton,” she added.
Queenstown
Residential property values are up once more in Queenstown.
The average home value increased by 4.4% to $1,807,282 throughout the January quarter – an increase on the 3% quarterly increase reported at the end of December 2023.
Queenstown’s average annual rate of home value growth is currently 7%.
Invercargill
Invercargill recorded a small reduction this quarter.
The city’s average home value reduced by 0.6% to $466,898 throughout the three months to the end of January 2024.
“This quarterly decrease follows six monthly increases in a row and may be an anomaly due to the Christmas holiday break,” said QV registered valuer Andrew Ronald.
“There is still much less demand now compared to early in 2022, especially for properties within the $600,000 to $1,000,000 range. While there is still healthy demand from first-home buyers, only a limited number of investors are currently active in the market – although this is expected to change with the restoration of interest tax deductibility rules.”
The QV HPI uses a rolling three month collection of sales data, based on sales agreement date. This has always been the case and ensures a large sample of sales data is used to measure value change over time. Having agent and non-agent sales included in the index provides a comprehensive measure of property value change over the longer term.
