What to expect in 2024?
The New Zealand housing market is signaling a shift towards slow and steady growth in 2024, evident in a general deceleration of home value growth in the last quarter, according to Quotable Value (QV).
The latest QV House Price Index revealed that while home values have seen an uptick in all major urban centres monitored, the overall national growth rate has moderated.
The average home value rose by a modest 0.6% in the December quarter, reaching $905,070. This marks a notable slowdown from the 2.3% quarterly increase reported in November.
Among the main centres, Rotorua (6%) and Tauranga (3.3%) reported the highest average home value growth in the December quarter, with the latter rebounding from a slight deficit in the previous month.
New Plymouth (0.4%), on the other hand, recorded the smallest increase on average, while Auckland (1.9%), Wellington (2.4%), and Christchurch (2.5%) maintained relatively robust growth compared to national standards.
James Wilson (pictured above), QV operations manager, attributed the slight slowdown in national home value growth to an increase in new property listings and available stock, providing a more balanced supply and demand scenario in key markets.
“With relatively low sales volumes in many markets across the country, it doesn’t take much change in activity to change the overall value performance,” Wilson said.
“This slight stalling in the rate of home value growth nationally could well be a result of the increase of new property listings and stock available for purchase, which came to the market throughout the last few months of the year and allowed supply to balance demand in some key markets, thereby suppressing competition.”
Property market in 2024
Wilson noted that the influx of new listings is likely to boost market activity in January and February, with competition among buyers expected to ease temporarily. Looking ahead, Wilson anticipates continued home value strengthening in the coming months, gradually slowing as autumn approaches.
“High net migration remains in place, increasing demand and putting pressure on the rental market, and the expected reintroduction of interest deductibility for property investors will also certainly impact the housing market,” Wilson said.
“However, the biggest handbrake to home value growth right now is interest rates, which are expected to remain at current levels throughout much of 2024 as the Reserve Bank looks to reduce stubbornly high inflation levels.”
While many buyers and sellers may currently overlook the impacts of climate change and natural hazards on their properties, Wilson warned of potential changes in the year ahead.
The nationwide land risk classification framework under assessment and insurers signaling changes in coverage within certain risk areas could reshape value fundamentals in higher-risk locations.
Click here for a regional breakdown of the latest QV House Price figures.
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