Modest growth amid listings surge and sales slump
The first quarter of 2024 has seen New Zealand’s residential property values making modest adjustments, according to the latest figures from Quotable Value (QV).
The QV House Price Index for March showed the national average home value climbed by 2.2% to $924,734, slightly improving from February's 1.3% increase. This growth marks a 1.9% rise from the previous year yet remains 13.1% beneath the market peak in late 2021.
Urban areas’ performance
Queenstown led the urban growth chart with a 2.7% increase this quarter, followed by Wellington and Christchurch with 2% and 1.5% respectively. Despite these gains, all three cities saw diminished growth compared to the previous period, with Auckland notably declining by 0.2% for the second consecutive month.
Market observations
James Wilson (pictured above), QV's operations manager, described the current market mood as “flat,” indicative of New Zealand’s residential market gradually stabilising amidst economic challenges.
“We’re seeing only modest movement across the nation – mostly up, but some down – which is a fair reflection of a housing market that is continuing to find its footing again amidst some pretty strong economic headwinds,” Wilson said.
“Although the pendulum has clearly swung in favour of prospective purchasers, with a relatively large number of properties on the market today giving them plenty of choice and helping to maintain downward pressure on prices overall, interest rates and credit constraints are continuing to make life very difficult for everyone.”
Impact of new listings and economic factors
The influx of new listings has notably cooled the main centres, especially Auckland, where home values have stalled.
“The recent influx of new listings on the market appears to have had more of a cooling effect within the main centres so far,” Wilson said, anticipating this trend to persist in larger cities.
Outlook amidst immigration and interest rate changes
Immigration continues to buoy demand, mitigating potential sharp declines in property values. However, Wilson suggested that significant growth or declines are unlikely in the near term.
“‘Flat’ is the best word to describe the market today and its trajectory, even with the recent reintroduction of 80% interest deductibility for landlords,” he said.
For the regional breakdown of the latest QV House Price figures, visit the QV website.
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