New Zealand house prices are showing signs of rising again, experts say after a report on Friday signalled the softening market could be bottoming out.
House values decreased by 0.2 percent month over month in August, compared with a 0.4 percent fall in July, marking the smallest drop since the start of this year, data from CoreLogic showed. A separate property report from realestate.co.nz showed average asking prices were actually up 0.7 percent from a month earlier in August.
Both reports showed prices were still falling year-on-year.
For nearly two years, rising interest rates on the back of aggressive official cash rate hikes by the Reserve Bank have cut into house prices that skyrocketed during the COVID-19 pandemic. According to the Real Estate Institute of New Zealand, the country's median house price was $770,000 as of July 31 - down from its 2021 peak of $925,000.
ASB believed the market was "essentially at a trough now and is set to start warming up again", said bank economist Nathaniel Keall.
"Some data series actually show prices lifting a bit over the past couple of months - according to seasonally-adjusted data from the Real Estate Institute, prices have lifted about 1.5 percent since May," he said.
"Stronger population growth and slowing residential construction are supporting prices, but we're not expecting to see the same acceleration in prices that we saw during the 2020-21 period. Interest rates are much less favourable for one thing."
Vanessa Williams, the spokesperson for realestate.co.nz, said the findings in its report pointed towards a gradually-recovering housing market.
"Spring is typically a time for new growth and beginnings - it looks like it's come early to the property market this year. Although with the election right around the corner, the growth might be gradual as Kiwis wait to see what happens with the Government."
Realestate.co.nz's data showed there were still strong year-over-year house price gains in Gisborne and West Coast, up 5.1 and 2.8 percent respectively. At the other end of the scale, the data showed Wairarapa (-12.5 pct) and central Otago (-10.4 pct) experienced the greatest price decelerations.
