Property values down 2.5% from peak
CoreLogic’s updated home value index (HVI) reveals a 0.5% fall in property values across New Zealand in July 2024, marking the fifth consecutive monthly decline.
This brings the total decline since February’s mini peak to 2.5%.
Median value drops
The median value across all properties now stands at $827,515, down from $848,713 in February, equating to a $21,200 decrease.
Property values remain approximately 16% below the January 2022 peak but are still about 19% higher than pre-COVID levels.
Economic factors influencing market
“In an environment where economic growth is subdued and unemployment rising – with a knock-on sentiment effect even for those that are employed – it’s logical to expect that the housing market would reflect this,” said Kelvin Davidson (pictured above), CoreLogic NZ chief property economist.
High listing volumes have given buyers negotiating power, leading to longer transaction times and lower prices.
Regional variations in property values
July saw declines in all main centers, with Tauranga down 0.9% and Auckland down 0.8%, while Christchurch remained relatively stable, dropping just 0.1%. Auckland and Wellington recorded the largest declines since April, each falling 2.7%.
Buyer behaviour and market outlook
Davidson noted that buyer interest is lower than desired due to high rural interest rates and economic uncertainty.
“Buyer enquiry on most farm listings is lower than desired as farmers grapple with the change in weather, lower-than-needed farm product prices, and higher farm working expenses,” he said.
However, there is anticipation for a busier spring market as new listings come in.
Mixed results in regional markets
Some regional markets showed resilience, with property values up 0.6% in Whanganui, 0.7% in Queenstown, and 1.0% in Invercargill.
Conversely, New Plymouth, Whangarei, and Napier saw declines of 0.9% and 1%, respectively.
Market predictions
Davidson suggested that mortgage rates and listings data will be crucial indicators to watch.
“Clearly, a medium-term drop in mortgage interest rates will help the finances of many homeowners,” he said.
However, new debt-to-income ratio limits could temper any interest rate-driven market boost.
Davidson concluded that the second half of 2024 could remain challenging, but aspiring first-home buyers may benefit from increased choice and stable prices.
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