Winter brings market chill
The QV house price index for May has revealed a slight decrease in property values across New Zealand Aotearoa, marking the first quarterly reduction since July of the previous year.
National home values have dropped by an average of 0.2%, with the current average value standing at $923,713. This figure is down from the 0.1% growth in April, yet still represents a 3.9% increase compared to the same period last year.
Home values across regions
Significant variations were noted across different urban areas.
Auckland experienced the most pronounced decrease, with an average home value drop of 1.4%, continuing its four-month negative trend.
Other cities like Wellington, Tauranga, Hamilton, Palmerston North, and Nelson also saw declines, albeit modest ones.
In contrast, cities such as Invercargill, Rotorua, Christchurch, and Dunedin recorded gains, with Invercargill leading at a 3.2% increase for the quarter.
QV operations manager James Wilson (pictured above) provided insights into the current state of the housing market.
“Home values continue to bobble up and down from month to month and quarter to quarter, but they aren’t moving one way or the other with any real conviction,” Wilson said. “The housing market has largely stalled, and now the seasonal slowdown is well and truly upon us.”
He highlighted the excess of housing stock and the advantageous position of buyers in the current market.
Regulatory changes and market predictions
The property market is also facing new regulatory challenges, including the implementation of debt-to-income (DTI) restrictions and adjustments to loan-to-value ratios (LVRs) starting from July 1. These changes are expected to influence market dynamics, alongside the shortening of the bright-line test to two years.
Despite these adjustments, Wilson anticipates the market to remain flat or slightly soften throughout the winter season.
“Property owners might look at our latest figures and start getting that sinking feeling again. While first-home buyers might even look at them with renewed optimism,” the QV leader said, indicating a market caught in uncertainty.
For a regional breakdown of the latest QV house price figures, visit the QV website.
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