Listings surge, values increase unevenly
The OneRoof-Valocity House Value Index for April 2024 has revealed a significant shift in New Zealand's property market, now favouring buyers due to a substantial increase in listings.
Although property values have shown minimal growth across most regions, with Bay of Plenty and Gisborne experiencing declines, the overall property market sees a 0.5% growth over the quarter.
Auckland’s stagnant growth
Despite some high-profile sales, Auckland’s property value growth has stalled, increasing by a mere 0.1% to an average of $1.33 million. This slowdown contrasts with the vibrant activity observed in March, including the record auction sale price.
Year-on-year value increases
Contrasting with the slow quarterly growth, 60% of suburbs nationwide reported a year-on-year increase in property values, the OneRoof-Valocity House Value Index showed.
Suburbs in Canterbury and the West Coast demonstrated the most significant gains, with Mataura in Gore experiencing a remarkable 19.5% surge in average property value.
Christchurch and Queenstown-Lakes lead metro areas
Christchurch and Queenstown-Lakes emerged as the top performers among major metropolitan areas, with every suburb in these regions showing year-on-year price increases.
In contrast, Auckland, Hamilton, and Tauranga are experiencing a slower recovery, with just more than half of the suburbs reporting value increases.
Suburb recovery and listings surge
A notable 21 suburbs have reached or exceeded their post-COVID peak values, with an additional 64 suburbs close behind.
“The listings surge has given buyers a chance to pause and gives them more bargaining power than they had six months ago, when much less stock was on the market,” OneRoof editor Owen Vaughan said.
Regional growth variances
Regions like Otago, Tasman, and Wellington registered more than 1% growth over the quarter, but the West Coast stood out with a 6.6% increase in average property value. Queenstown-Lakes also saw a significant 2.5% increase in value, although overall momentum in major metros has decelerated.
Affordability concerns and economic uncertainty
Helen O’Sullivan, Valocity's global CEO of real estate, highlighted ongoing affordability issues and economic uncertainty as barriers to growth.
“The proposed changes to the bright line test and interest deductibility may provide relief to existing investors, but it remains uncertain if the changes will entice investors to enter the market, particularly in the current high-interest rate climate,” O’Sullivan said.
Read the OneRoof-Valocity House Value Index report in full here.
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