QV reports subtle growth amid economic challenges
One month into 2025, James Wilson (pictured above), QV operation manager, described the year as already shaping up to be intriguing for the housing market, despite the latest figures not fully capturing the unfolding dynamics.
According to the latest QV House Price Index, national residential property values have seen a modest increase of 1.3% in the January quarter.
The average home price now stands at $913,567, just 1.3% lower than last year and 14.1% below the peak in late 2021.
Economic influences and market responses
Wilson observed that, on the surface, 2025 appears to be continuing the predominantly flat trend observed throughout much of the previous year.
“This is to be expected, given the economic factors at play – namely high interest rates and credit constraints, sustained weakness in the labour market, and an oversupply of properties available for sale,” he said.
Despite these challenges, there are signs of stabilisation and slight upward trends in home values.
As mortgage rates begin to fall and property sales volumes increase, there could be potential for more significant market growth later in the year.
Regional market variances
While most urban areas monitored by QV across New Zealand Aotearoa reported gains, a few recorded modest reductions this quarter, with Whangarei, Hastings, and Queenstown experiencing slight declines.
Conversely, cities like Auckland, Hamilton, Tauranga, Napier, Dunedin, and notably Invercargill saw above-average increases. Invercargill notably marked a significant milestone with average home values increasing by 3.8% this quarter, surpassing the $500,000 mark.
The outlook for 2025
Wilson remains cautiously optimistic about the housing market’s potential.
“That won’t happen overnight, of course, but we will be actively monitoring this space with interest – as I’m sure many sellers, purchasers, and investors will be throughout 2025,” he said.
He highlighted the increase in property listings as a positive sign, suggesting a busy summer market. The excess stock will need to be absorbed to see more pronounced price increases, which could be expedited by further interest rate reductions.
Market dynamics and future prospects
Overall, the housing market in New Zealand is navigating through economic headwinds with resilience. The early part of 2025 has shown that while the market conditions are not surging, there is incremental growth and stability in several regions.
The ongoing adjustments in mortgage rates and potential economic improvements could further influence the market as the year unfolds, providing both challenges and opportunities for stakeholders in the real estate sector.
