Prices fall across New Zealand
Home value growth in New Zealand has halted, with a decline of 0.2% in May following a 0.1% decrease in April.
According to CoreLogic’s House Price Index, the average property value now stands at $931,438. This represents a year-over-year increase of 1% but is still about 11% below peak levels.
Auckland’s significant drop
Auckland experienced the most notable decrease among the main centres, with property values dropping by 0.8% in May after a 0.6% fall in April.
Conversely, Christchurch, Hamilton, and Dunedin recorded increases in property values, showcasing the varying conditions across the country.
Regulatory changes and market impact
Kelvin Davidson (pictured above), chief property economist at CoreLogic NZ, highlighted the effects of recent regulatory changes on the housing market.
“The abrupt scrapping of first home grants and the introduction of debt-to-income caps, coupled with high mortgage rates, have significantly slowed the market momentum observed earlier this year,” Davidson said.
Buyer’s market emerges
With an increase in property listings, buyers are gaining more bargaining power, which is keeping prices subdued. Davidson also noted that the upcoming changes to the Brightline Test might encourage more listings, potentially altering the market dynamics further.
Varied regional performances
While Auckland and Wellington saw declines in property values, areas like the Kapiti Coast and certain provincial regions like Whanganui, Rotorua, and Queenstown experienced growth. However, other regions like Invercargill and Hastings faced declines.
Outlook for 2024
Looking forward, Davidson predicts that the housing market will remain subdued in 2024, with variable activity and prices.
“Affordability issues and the absence of significant mortgage rate reductions are likely to continue affecting the market,” he said.
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