Aotearoa New Zealand's average home value is zeroing in on the $900,000 mark following yet another month of widespread declines across the motu, new data has found.
The latest QV House Price Index, released on Tuesday, showed values have reduced by an average of 4.5 percent throughout the first four months of 2023, including an average reduction of 0.6 percent in the month of April. QV said this is a marked improvement on the 1.4 percent average decline recorded back in March.
The national average home value is now $902,501, which is 13.3 percent less than the same time last year, but 22 percent higher than before the COVID-19 pandemic first began.
The average rate of home value decline has slowed in 10 of the 16 largest urban areas that QV monitors. This includes Auckland, where the rolling three-month rate of reduction has slowed from 5.2 percent in March to 4.4 percent in April.
However, it is still the second-largest average home value decline this quarter, after Whangārei (4.6 percent). Wellington's average rate of home value decline has also slowed to 3.7 percent this quarter, down from a 4.8 percent quarterly decline back in March.
In the South Island, Queenstown was the only one of the country's main urban centres to record positive home value growth at an average of 2.8 percent.
Elsewhere in the South Island, Christchurch (-3.7 percent) and Dunedin (-3.1 percent) both recorded notably larger quarterly home value reductions in April than they did back in March (-1.2 percent and -1.6 percent respectively).
QV national spokesperson Simon Petersen said there is a "mixed bag" of results across Aotearoa right now.
"The market fundamentals have not changed - credit constraints and high interest rates continue to have a stranglehold on the market - but we are starting to see some small signs that it could be approaching equilibrium," he said.
"Though it's still far too early to say precisely when the downturn will bottom out, the Reserve Bank's recent proposal to ease mortgage loan-to-value ratio (LVR) restrictions, coupled with additional changes to the treatment of expenditure in application processes, could certainly bring some buyers back into play.
"Immigration is also continuing to ramp up in the background, fuelling demand for housing. These things won't revitalise the real estate market overnight, but they may provide some relief at a time when activity is at historic low levels."
Petersen said buyers remained scarce, even as new listings fell to historic lows in April. He said investors are sitting on their hands for the most part and could be biding their time until they see the outcome of this year's general election.
Additionally, Petersen said owner-occupiers are having to weigh up the considerable challenges and risks of trying to buy and sell in a difficult market environment.
"While large numbers of first-home buyers are still being locked out of it altogether due to its unaffordability - the cost of living crisis being a major barrier to saving for a deposit, and then being able to service a mortgage," he said.
"Meanwhile, the real estate market is continuing on its steady climb back down the mountain of very significant home value growth we saw in 2020 and especially 2021. It's still a long way off its pre-COVID-19 levels for the most part, but this corrective cycle isn't over yet - it still looks as though the market is destined for a difficult winter ahead."
Auckland
The average home value across Auckland is now 15.4 percent lower than the same time last year at $1,262,390.
The region's rolling three-month rate of reduction slowed from 5.2 percent in March to 4.4 percent in April, with five of the super city's former territorial authorities also seeing their rates of reduction reduce. Rodney (-4.2 percent) and North Shore (-3.5 percent) were the two exceptions, with Manukau (-5 percent) recording the largest average reduction in home value (a 1.7 percent improvement on last month's figure).
Franklin District managed to buck the downward trend entirely this quarter. Its average home value increased by 1.6 percent to $932,918.
Despite this, local QV valuer Hugh Robson said it was too early to say whether or not the Auckland market was starting to bottom out.
"Auckland's residential property market continues to be very quiet. We're seeing low sales volumes, quiet open homes, and extended selling periods," he said.
"In Waitākere and Auckland's central suburbs, properties are regularly selling at around 10-15 percent below their rating values. Buyers are generally paying prices similar to the levels seen in May or June 2021."
Wellington
The downturn slowed this quarter in Wellington. The latest QV House Price Index shows home values reduced across the region by an average of 3.7 percent throughout the April quarter. This is still a faster rate than the national average (-3.5 percent) but is well down on the 4.8 percent average decline for the March quarter. The average home value is now $838,158.
The largest declines this quarter occurred in Porirua (-6.6 percent), Kāpiti Coast District (-5.1 percent), and Wellington City (-3.4 percent), despite the latter showing a small but statistically significant amount of home value growth during the month of April (0.2 percent).
Local QV senior consultant Blake Ngarimu said the statistics are showing signs that we may be nearing the bottom.
"Over the month of April the average value in Wellington City has remained relatively stable with a slight increase of 0.2 percent, values in Lower Hutt decreased by 0.2 percent, and they decreased by 0.6 percent in Upper Hutt," he said.
"Porirua experienced the largest decline of 2.6 percent, but otherwise it was a relatively stronger month for the region's housing market."
He added that most active buyers in recent months tended to be first-home buyers.
Canterbury
The latest QV House Price Index showed the average home value has fallen across Christchurch by 10 percent since the end of April last year to $721,460. It's the city's first double-digit annual decline since the 12 months to the end of February, 2009.
The latest figures show Christchurch's average rate of home value decline increased from 0.5 percent in March to 2.8 percent in April, with the city's three-month rolling average also increasing from an average decline of 1.2 percent to 3.7 percent.
Local QV registered valuer Olivia Brownie said while New Zealand has seen a slow in value decline, the same can't be said for Christchurch or for the wider region.
"We're slightly behind the rest of the country in terms of the current property cycle, with house values holding up better locally throughout much of last year than they did elsewhere," she said.
"Buyers appear non-committal and prices are being dropped, especially on properties that aren't necessarily meeting good criteria. Nevertheless, we are seeing the first signals that we have reached interest rates peaks now, and other factors such as an increase in net migration means we may see the property market reach an equilibrium in the greater Christchurch area after a cool winter."
Meanwhile, home values are on average 8.2 percent less across the wider Canterbury region than they were at the same time last year, including a 2.9 percent average reduction this quarter.
Queenstown
Queenstown's average home value went in the opposite direction to almost everywhere else this quarter.
Buoyed by a big April, the tourist town has recorded 2.8 percent average home value growth for the most recent quarter. Its average home value is now $1,736,877, which is 5.3 percent higher than the same time last year, compared to an average annual decrease of 13.3 percent nationally.
Local QV registered valuer Greg Simpson said property market conditions are currently subject to high potential for change and market uncertainty.
"We note that there is currently reduced sales volumes locally and fluctuating but still generally positive value growth for residential property," he said.
"Selling prices in Queenstown Lakes District are well above other districts. This is likely to continue given the recovery of the tourism industry and the general shortage of housing in the main centres of Queenstown and Wanaka."
