Steeper decline than previous month
The QV house price index for July showed a national decrease in residential property values, with an average drop of 1.9% over the past three months.
This decline is steeper than the 0.9% reduction recorded in June, reflecting the ongoing economic downturn.
“Residential property values are slowly shrinking across all price brackets,” said QV operations manager James Wilson.
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Auckland and Wellington hit hardest
Auckland recorded its sixth consecutive month of negative growth, with home values down 3.4% this quarter, while Wellington has seen values decrease for four straight months.
Only Marlborough, Invercargill, and Queenstown showed slight positive growth, but gains were minimal.
“Sellers are having to adjust their expectations... or play the waiting game until conditions eventually improve,” Wilson said.
Market imbalance keeps prices under pressure
The housing market is facing a major imbalance, with a high number of properties for sale and a limited pool of buyers. This situation is contributing to the downward pressure on prices.
“There’s a shallow pool of buyers who are willing and able to make a purchase,” Wilson said, adding that the current market conditions are leaving both buyers and sellers in a tough spot.
Hope for mortgage rate relief grows
Despite the current market challenges, there is growing optimism that mortgage rate relief could be on the horizon.
Wilson pointed out that the Reserve Bank’s recent monetary policy review hinted at a possible shift, which could bring some relief to homeowners.
“Homeowners are certainly feeling the strain right now,” he said, noting that upcoming Reserve Bank announcements will be closely watched.
Outlook remains gloomy for home values
Looking ahead, Wilson expects home values to remain flat or continue to gently decline through the rest of winter.
“Unemployment is on the rise, and we may see an uptick in mortgagee sales... but it’s still unlikely that we’ll see any strong value declines,” the QV leader said, predicting a slow recovery for the housing market.
Visit the QV website for a regional breakdown of the latest QV House Price figures.
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