The number of towns, regions, and cities hitting double-digit home value declines this year is growing, new data shows.
The QV House Price Index shows the average price decreased in value by 3.9 percent over the three months to the end of October, with the national average now sitting at $951,040.
That figure is 5.1 percent lower than the same time last year and 9.7 percent lower than at the start of 2022.
Wellington - at a value decline of -17.6 percent - led the way for main centres and is alongside Auckland (-11.7 percent), Hamilton (-10.5 percent), Napier (-11.6 percent), Hastings (-11.5 percent), Palmerston North (-13.7 percent), and Dunedin (-10.4 percent).
QV chief operating officer David Nagel said the traditional spring upswing in the residential property market hasn't amounted to much more than a small speed bump this time around. There are just a few pockets of true home value growth and only a relatively small decline in the market's downward trajectory these past two months in a row.
"We have certainly seen a seasonal surge in the number of properties coming onto the market, as spring is often seen as a good time to sell with longer days and summer looming large on the horizon," Nagel said.
"This has kept downward pressure on prices, especially as interest rates have also risen and are expected to climb further to stifle high inflation."
The only exception was Queenstown, where home values increased 2.9 percent this quarter. New Plymouth also had a slight 0.1 percent reduction in average home value.
All other main urban areas had declines of between 1.5 percent and 6.8 percent, with Wellington, Tauranga, and Hastings posting the largest declines in the three months to the end of October.
Across the Auckland region, the average value now sits at $1,348,213, falling 4.4 percent this quarter, which is a slight improvement on the 5.8 percent rate of negative home value growth reported in the previous three-month period.
All but one of the Super City's seven former territorial authorities are now showing negative home value growth annually, with five out of seven also showing double-digit declines for 2022.
"This year couldn't be much more different to the last one for much of Aotearoa New Zealand. At the same time last year, the QV House Price Index was showing an average home value increase of 22.2 percent throughout the first 10 months of 2021 - now it's showing an average decline of 9.7 percent over the same period," Nagel said.
"Though the average rate of decline has slowed somewhat in recent months, and it may even continue to slow as summer approaches, increasing volumes of listings are giving purchasers plenty of choice and the upper hand when it comes time to negotiate - and wIth interest rates trending upward, no one is going to willingly service a larger mortgage than they have to. This will likely continue to have a dampening effect on the market for a good while yet."
Auckland
The Auckland region's average rate of home value decline has now officially hit double figures for 2022.
The regional average is now a -11.7 percent decline in the 10 months to the end of October. Only Rodney (-7.2 percent) and Franklin (-8.9 percent) remain in single-digit declines, with the largest average reductions occurring across Auckland's central suburbs (-12.4 percent), on the North Shore (-12.1 percent), and out west in Waitakere (-11.9 percent).
Despite this, Auckland's rate of home value decline actually slowed slightly this quarter, from 5.8 percent in the three months to the end of September to 4.4 percent in the three months to the end of October. That includes an average decline of 0.8 percent last month, which is 1 percent better than the month before.
"Sale prices continue to fall - albeit at a slightly lower rate than the falls noted in August and September," said local QV valuer Hugh Robson.
"The number of new residential listings in Auckland has also increased significantly during October, which is quite normal for this time of year."
Robson said with interest rates continuing to creep up - which is putting large numbers of potential home buyers off - and an increasing number of new listings, the market may start summer with a flood of unsold stock.
"In fact, some agents continue to report having difficulty convincing sellers that the market is not what it was last year, meaning that their expectations are often well above the reality of the current market."
Tauranga
Tauranga's average rate of home value decline has slowed this quarter but remains quicker than the national average.
The city's average home value dropped 5.8 percent to $1,068,458 in the three months to the end of October 2022, which is an improvement on the 7.7 percent quarterly decline reported in last month's QV House Price Index.
Home values have fallen by an average of 3.9 percent nationally over the same period, with values down 5.1 percent nationally since the same time last year, compared to 4.1 percent in Tauranga.
"Listing numbers are well above their 2020 and 2021 levels. They declined over the winter months and have begun to pick up again now, as they usually do in spring, when properties typically look better and the weather is more conducive to going to open homes," said QV property consultant Derek Turnwald.
"Prospective purchasers are taking longer to deliberate over purchases and there's now much greater room to negotiate prices. Vendors are having to lower their expectations to meet the market, with demand for housing of all values generally subdued in comparison to previous highs."
Wellington
The seasonal spring upswing in the residential property market has been subtle at best this year in Wellington, QV said.
Home values have fallen by an average of 6.8 percent across the wider Wellington region this quarter - an improvement on the 9.6 percent QV reported at the end of September, but still a significantly larger decline than the national average of 3.9 percent.
Hutt City (-8.8 percent) and Upper Hutt (-7.6 percent) posted the largest average home value losses this quarter, with the average home value in the region now sitting at $894,913 - 16.3 percent lower than at the end of October last year.
"Values continue to slide in the Wellington region and further declines are expected as interest rates continue to rise," said local QV senior consultant David Cornford.
"There's plenty of stock on the market for buyers to contemplate and it's unlikely that these levels will decrease anytime soon, meaning supply will continue to outstrip demand for some time."
Cornford added that sales volumes have also been sluggish.
"Given the high level of uncertainty in the market, we're seeing a number of players just sitting on the sidelines taking a wait-and-see approach to their property decisions," he said.
"Homeowners who are in a hurry, or are under pressure to sell, are the most vulnerable to taking a hit in the current market."
Canterbury
The QV House Price Index recorded another "soft decline" in house values last month in Canterbury.
Values fell by an average of 0.5 percent across the wider region in October, with the rolling three-monthly rate of decline decreasing from an average of 2.3 percent to 1.7 percent.
In Christchurch, house values went down 0.7 percent last month, which was a further decrease from the 0.6 percent decline recorded back in September.
They remain in the black at 3.9 percent net positive growth over the past 12 months, despite falling to a 3.2 percent decline for 2022.
"To date, the Canterbury market downturn has not gained momentum irrespective of the aggressive hikes in interest rates over recent months, as it has elsewhere in New Zealand, but the risk remains," said local QV property consultant Olivia Brownie.
"In the meantime, Christchurch's lower values in comparison to other large NZ cities continue to keep some upward pressure, effectively offsetting any significant downturn to date."
Queenstown
As mentioned, Queenstown stands alone as the only one of New Zealand's main centres to record positive home value growth for the quarter.
The latest QV House Price Index shows the average home value in Queenstown increased by 2.9 percent this quarter to $1,700,421. The tourist town is still showing positive home value growth of 4.9 percent for 2022.
"We note that there is currently reduced sales volumes and tapering but still positive value growth for residential property," said QV property consultant Greg Simpson.
"With inflation now becoming more entrenched, further interest rate rises are expected from the major lenders, which will continue to have a cooling effect on the housing market."
