CoreLogic reports signs of stabilisation in New Zealand's housing market
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As of January, New Zealand’s housing market appears to be nearing a trough, with property values showing minimal movement, indicating a potential shift towards recovery.
The CoreLogic Home Value Index (HVI) recorded a marginal decrease of 0.1% in January, marking a continuation of the trend observed over the past five months.
Minor fluctuations indicate market stabilisation
Gradual decrease following previous declines
Following a significant drop of 4.1% from March to August, the market has seen only a slight cumulative decline of 0.4% since, suggesting that the worst of the downturn may be over.
The national median property value now stands at $803,819, down 17.5% from the peak in late 2021 but still 16.3% higher than pre-COVID levels in March 2020.
Regional variations highlight diverse market conditions
Mixed results across major centers
In January, most major centers like Tauranga and Ōtepoti Dunedin experienced negligible growth, while Tāmaki Makaurau Auckland and Ōtautahi Christchurch saw small declines.
Kirikiriroa Hamilton showed a notable increase of 0.5%, contrasting with Te Whanganui-a-Tara Wellington, which experienced a decrease of 0.6%.
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CoreLogic insights on future market trends
Kelvin Davidson (pictured above), CoreLogic NZ’s chief property economist, suggests that the market’s stability could be a precursor to growth.
“Since the ‘mini downturn’... national property values have been in a holding pattern," Davidson said.
He also highlighted the impact of decreasing mortgage rates and rising property sales volumes on potentially reducing the stock of available listings, which may drive up property values in the near term.
Continued caution advised
Despite these positive signs, Davidson urged caution, noting ongoing declines in some areas like Wellington. The economic and labor market conditions remain subdued, potentially capping any significant upswing in property values.
Looking ahead: Market projections for 2025
The New Zealand property market’s outlook for 2025 suggests a cautious optimism.
With net migration slowing, the overall population growth and housing demand, particularly in the rental sector, may see some dampening.
However, recent tax rule adjustments and lower interest rates could incentivize investor activity and sustain rental property cash flows. Davidson predicts a more liquid and dynamic market conducive to various buyer groups, including first-time homeowners.
For detailed market analysis, visit CoreLogic's dedicated property insights page at www.corelogic.co.nz/news-research.