Source: CoreLogic
Property values in New Zealand fell -0.5% in October according to CoreLogic’s hedonic Home Value Index (HVI) – the eighth drop in a row – taking the total decline in values since February to -5.1%.
“Rising sentiment may take some time to hit the ‘hard data’, but there’s a sense that the end could be in sight for the recent downturn.”
“For property investors in particular the falls in mortgage rates are key, flowing directly through to better cashflow on a typical rental purchase – or in other words reduced losses – and smaller top-ups from other income. Increased interest deductibility supports that effect too.”
Tāmaki Makaurau Auckland
Each of Tamaki Makaurau Auckland’s sub-markets saw property values decline in October, although the falls in Papakura and Franklin were marginal (-0.1%). Elsewhere, the falls ranged from -0.4% in Rodney, up to -0.8% in Auckland City and -0.9% in Manukau.
Generally speaking, values across Tamaki Makaurau Auckland are still around 21-24% lower than the post-COVID peak (apart from a drop of closer to 26% in Waitakere), while the falls since the more recent ‘mini peak’ at the start of this year have typically been between -7% and -9%.
Mr Davidson added: “Auckland’s property market continues to be weighed down by abundant supply, both in terms of existing properties listed for sale as well as the continued pipeline of new-builds being completed. However, there are signs in a market such as Papakura that values have started to flatten out to some degree, so it’ll be interesting to see if the falls also lessen or stop altogether in other parts of the super-city in the next few months too.”
Te Whanganui-a-Tara Wellington
The wider Te Whanganui-a-Tara Wellington area underperformed in October, with Porirua down by -0.5%, and then the falls increasing to -0.7% to -0.8% in the Hutt Valley, and to more than 1% in both Kapiti Coast and Wellington City itself. Porirua has been slightly more resilient than elsewhere over a wider three-month horizon – while across the rest of Wellington, values are down by close to 3% or more since July.
“Wellington looks to be a good example of where job insecurity is outweighing the benefits to sentiment and households’ finances of lower mortgage rates. This could also make it an interesting test case for property values, in terms of the strength of any recovery in 2025 amidst the backdrop of labour market weakness.”
Regional results
Reflecting the counteracting influences of lower mortgage rates and job losses, property value trends across many of the provincial markets remained patchy in October. Nelson, Whanganui, Rotorua, and Gisborne all edged higher, while Queenstown was stable. But value falls of -0.7% or more were seen in Invercargill, Whangarei, and Napier.
“Putting aside the normal monthly variability that you see in any part of the cycle, it’s interesting to note the recent divergences over the year as a whole,” Mr Davidson noted, pointing to areas such as Napier and Whangarei which were down by -7% to -9% since the latest mini-peak, compared to Whanganui and Invercargill, which were down by -1 to -2%.
“Lower house prices in the latter two areas may have given their markets some insulation. Of course, the affordability argument certainly doesn’t apply in somewhere like Queenstown, where the market has only fallen slightly in 2024 despite a median value of $1.5m.”