But there's positive news for first-home buyers
The New Zealand property market has continued to slump, with the latest housing figures showing its first annual price decline in a decade.
The latest QV House Price Index showed prices dipped by an average of 2.1% nationwide in the 12 months to the end of September – the first annual home value reduction since June 2011 and the ninth straight month of declining home values nationally.
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Over the three months to the end of September, the value of the average home decreased by 5.4% nationally, to $954,592, which is 9.2% lower than at the start of 2022, Newshub reported.
“The Reserve Bank’s decision last week to raise the official cash rate (OCR) by another 50 points all but ensures the path we're on will continue for the foreseeable future,” said David Nagel, QV general manager. “Interest rate rises, credit constraints, the increasing cost of living – it's a sure-fire recipe for declining home values. Plus, there are still new houses coming onto the market up and down the country, putting further downward pressure on prices almost everywhere.”
NZ’s housing market downturn was in “full swing” as 80% of suburbs saw values drop, which Nigel said will be “worrying news” for Kiwis around the country who are looking to sell their homes and who purchased at the peak of the market, Newshub reported.
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He did have some positive news for first-home buyers, though.
“This market correction, as painful as it is for some, will hopefully afford others an opportunity to get into the market in the future,” Nigel said. “Though it's still very tough out there for prospective first-home buyers, they’re now gaining the upper hand when it comes to negotiations.”
The majority of the regions across the nation saw prices dip due to tight credit conditions and rising interest rates, except for Queensland, which reported a 0.2% quarterly home value growth.
Hit especially hard was Wellington, which saw its quarterly home value decline by 9.6% last month, followed by Tauranga’s 7.7%.
“The usual spring bounce in activity in the residential property market hasn't eventuated to the same degree as it has in previous years, but there are still plenty of active buyers out there, and deals are being done despite so much uncertainty," Nagel said. “Large volumes of listings are giving purchasers plenty of choices and negotiating power, but it certainly looks as though sellers may still be in for a rough ride yet.”
Auckland, NZ’s biggest city, continued to see its home values decline by an average 2.4% in the 12 months to the end of September, new figures showed. The average home value in the region now sits at $1,358,710 after eight straight months of negative home value growth, including an average of -5.8% in the most recent quarter. All Auckland districts posted negative home value growth this quarter, with Rodney (-6.9%), Auckland city (-6.6%) and Waitakere (-6%) experiencing the largest falls, Newshub reported.
In the Waikato region, the dropping house values saw Hamilton slipping into negative annual home value growth for the first time in more than a decade. It was also the first time since August 2011 that the QV House Price Index has shown an average drop in home value in Hamilton over a year-long period. The city’s average home value was down by 2.4% to $841,089 in the 12 months to the end of September, including a 2.5% drop in the most recent quarter.
The Wellington region also experienced another “notable decline” in September, with home values falling by an average of 3.1%. The wider Wellington region’s annual rate of negative home value growth now sits at 14.2%, with its quarterly rate of decline at 9.6%. The average home value in Wellington is now $903,259, down 16.9% compared to the start of 2022, the new figures showed.
In the Canterbury region, home values have continued to slump but with just a 1.1% drop for the calendar year, a 2.3% drop this quarter, and a 0.6% decline last month. The average home value in Christchurch was down 0.6% last month to $764,150, marking five straight months of negative growth.
Dunedin’s average rate of home value decline in September eased, with the latest figures showing the city’s average home value of $646,228 down by 4.6% this quarter, and by 0.7% in September – an improvement on respective losses of 6.7% and 1.4% seen last month, Newshub reported.
