9 May 2023

National average house prices 13% down on a year ago - QV

5:52 am on 9 May 2023
Christchurch based housing

The average rate of home value decline has slowed in 10 of the 16 largest urban areas. Photo: RNZ / Nate McKinnon

The value of housing continues to slide, with widespread drops throughout the country.

The latest QV House Price Index shows values were down by an average of 4.5 percent throughout the first four months of the year, including an average drop of 0.6 percent in April.

The national average home value fell 13 percent on the year earlier to $902,501, but 22 percent up on values set at the start of the Covid-19 pandemic in late February 2020.

QV national spokesperson Simon Petersen said", "We're seeing a mixed bag of results across the country right now, with the residential property downturn slowing in some centres, yet increasing in others.

"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."

The average rate of home value decline slowed in 10 of the 16 largest urban areas, including in Auckland, where the rolling three-month rate drop slowed to 4.4 percent in April, compared with 5.2 percent in March.

However, it was still the second-largest average home value decline this quarter, after Whangarei at 4.6 percent.

Wellington's average rate of home value decline also slowed to 3.7 percent this quarter, from a 4.8 percent decline in March.

Queenstown was the only one of the main urban centres to record positive home value growth at an average of 2.8 percent, which was a turnaround from last month's quarterly decline of 3.2 percent.

In contrast, Christchurch recorded a 3.7 percent drop, with Dunedin down 3.1 percent.

Interestingly, Christchurch and Dunedin are both seeing larger declines this quarter than last, with Christchurch marking its first double digit annual decline in 14 years," Peterson said, adding that Christchurch's home values fell 10 percent year on year.


Queenstown was the only one of the main urban centres to record positive home value growth. Photo: Crux Publishing Ltd

He said the market was quiet, with investors sitting on the sidelines waiting for the market to settle.

"And it looks like it's, it's going to stay that way for the foreseeable future. There's still a lot of water under the bridge to come.

"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," Peterson said.

"Investors are sitting on their hands for the most part, potentially biding their time while they wait to see what this year's election has in store for them - although continued 'stalling' of value declines within some of NZ's larger urban areas may begin to entice some who believe that we are at the bottom of the curve back into the market," he said.

"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.

"Owner-occupiers are having to weigh up the considerable challenges and risks of trying to buy and sell in such 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.

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