National home values see marginal growth
New Zealand’s housing market recorded a slight recovery in the November quarter, with home values increasing nationally by 0.3%, according to the latest QV House Price Index.
This marks the first quarterly rise since April, but the market remains subdued compared to its peak three years ago. The average home value now sits at $908,173, which is still 0.7% lower than a year ago.
QV operations manager James Wilson (pictured above) commented on the modest improvement.
“Time will tell whether or not we’re finally witnessing the modest beginnings of the housing market’s long-awaited rebound or whether this is just another small bump in what has been a remarkably bumpy road in recent years,” Wilson said.
Key urban centres show mixed results
Several major urban centres experienced modest gains, QV data showed.
Auckland rose 0.5%, recording its first positive quarter since January, while Hamilton led with a 1.2% increase. Christchurch and Dunedin also saw minor upticks of 0.3% and 0.7% respectively. Napier posted a 0.9% rise, signaling a potential rebound for Hawke’s Bay.
However, Tauranga (-1%) and Wellington (-0.9%) continued to see values decline, although at a slower rate compared to previous quarters.
Wilson pointed to interest rate stability and improved market sentiment as reasons for the slight recovery.
“Interest rate reductions have certainly paved the way for a general uplift in activity and market sentiment across much of the country,” he said. “But with such a large supply of homes for sale, demand isn’t yet converting into significant price pressure.”
Economic factors still in play
While the November data shows signs of stabilisation, economic challenges persist.
Inflation, job insecurity, and high property supply are dampening price growth. Wilson highlighted concerns over these ongoing factors.
“These are still pretty major factors today and will also continue to play a pivotal role in hampering any significant home value growth as we move into 2025, even as mortgage rate relief finally sets in,” he said.
Regional trends: Northland to Otago
- Northland: Values rose by 1.1% overall, with gains of 3.7% in the Far North but a slight decline in Whangarei (-0.3%).
- Auckland: Average values increased by 0.5% to $1,238,682, with North Shore (1.7%) and Papakura (1.1%) leading.
- Tauranga: A minor rebound of 0.2% in November wasn’t enough to offset a 1% quarterly decline.
- Waikato: Hamilton recorded its first quarterly rise (1.2%) since February, although values remain 0.2% lower for the year.
- Taranaki: New Plymouth saw steady growth of 1%, while Stratford rose 3.7%.
- Hawke’s Bay: Napier and Hastings posted increases of 0.9% and 2.3%, respectively.
- Wellington: Values fell 0.9%, though declines have slowed. Hutt City saw a slight uptick (0.1%).
- South Island Regions: Christchurch gained 0.3%, Dunedin rose 0.7%, and Invercargill rebounded with a 2% quarterly lift.
Outlook: Modest growth ahead
With one month remaining in 2024, New Zealand’s housing market is on track for its flattest calendar year in over a decade. While interest rate cuts expected in 2025 could offer relief, Wilson emphasised that supply still outweighs demand.
“Looking ahead, there’s still very little to suggest that house prices will suddenly take off any time soon, with supply far outweighing demand,” he said.
Buyers remain cautious, awaiting further economic stability. For now, any growth is expected to remain measured as New Zealand navigates its challenging housing market landscape.
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