Property values are slightly higher on average annually for the first time since August 2022.
This comes despite the latest QV House Price Index for February 2024 showing the rate of home value growth has largely flattened across New Zealand Aotearoa’s main urban centres this quarter, with the average home value increasing by just 1.3% nationally to $925,812 – down from 2% quarterly growth in our previous index.
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.
“This small but significant return to positive year-on-year growth means that all the value softening we have experienced over the last 12 months has now been reversed at a national level,” said QV operations manager James Wilson. “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 we monitor experienced more positive home value growth this quarter than last – Tauranga (3.1%), Nelson (1.2%), and Marlborough (3.1%) – with Auckland’s three-month rolling average going into negative territory (-0.1%) for the first time since August last year. Values in Wellington (2.5%) and Christchurch (2.4%) continued to grow, albeit at a reduced rate.
“This flattening trend is largely being driven by diminishing demand. 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,” Mr Wilson said.
“This trend is expected to continue over the next few months. Strong value declines are unlikely, even as we start moving into autumn and then eventually winter, when sales volumes are likely to reduce even further. 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.”
Meanwhile, the Reserve Bank’s decision to leave the Official Cash Rate unchanged means that short-term mortgage rates will remain broadly as they are for the foreseeable future.
“There is still a reasonable amount of uncertainty about what the Reserve Bank will do next – whether we’ll see it cut the OCR late this year, or whether we might even see it rise further. Either way, the real estate market doesn’t tend to like this sort of uncertainty,” Mr Wilson concluded.
Download a high resolution version of the latest QV value map here.
Northland
Slow and steady growth continues across the top of the North Island.
The latest QV House Price Index shows home values have increased across the wider Northland region by an average of 1.5% this quarter. Far North District (3.2%) experienced more growth on average, while Whangarei (0.4%) and Kaipara (1.4%) experienced less.
The average home value is $717,189 in the Far North, $735,032 in Whangarei, and $857,906 in Kaipara.
Auckland
Auckland’s hitherto slow-but-steady home value growth stalled in February.
The Super City’s average home value reduced by 0.4% to $1,285,996 last month, lowering its average three-month rolling rate of growth into negative territory (-0.1%) for the first time since August last year.
Now three of Auckland’s seven former territorial authorities have posted home value reductions on average this quarter – Waitakere (-0.5%), Papakura (-1.7%), and Franklin (-1.3%) – up from just one in the previous index.
Local QV registered valuer Hugh Robson commented: “Some bumps in the road are to be expected as the market continues its very slow recovery from the 2022 downturn, especially while mortgage rates remain so high.
“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.”
Tauranga
Home value growth remains relatively robust in Tauranga compared to most other main centres.
The city’s average home value increased 3.1% to $1,040,514 this quarter, up from the 2.2% growth reported for the January quarter. The average value is now just 0.5% less than at the same time last year, and 31.1% higher than at the outset of Covid-19 back in March 2020.
Waikato
Home value growth remains slow going in Hamilton.
The city’s average home value has grown 1.1% to $791,356 this quarter – including by just 0.2% during the month of February – which is slightly slower than the 1.8% growth reported for the January quarter.
The average home value is now just 0.5% lower than the same time last year, and 23.2% higher than at the outset of Covid-19 in March 2020.
Local QV property consultant Marshall Wu commented: “The housing market has started the year on a similar footing to where it left off at the end of last year, with values generally trending higher. The key factors shaping the outlook for 2024 are diverse – the path of inflation, interest rates, credit policy, and migration tr
