Property values nationwide are up year-on-year but first-home buyers still have the advantage.
New Zealand’s average property value was up 3.33% year-on-year to $975,000, but the last three months saw values dip 0.2%, the latest OneRoof-Valocity House Value Index figures show.
The slowdown in price growth will put more homes within reach of those trying to get a foot on the property ladder.
According to the latest figures, the average property value was down quarter-on-quarter in three regions – Auckland, Bay of Plenty and Gisborne – and only up marginally in another eight.
Start your property search
The country’s most affordable regions remain the strongest in house price growth.
West Coast’s average property value grew 4% ($18,000) to $468,000 in the three months to the end of May. Southland was not far behind, with growth of 3.4% taking its average property value to $551,000.
Local first-home buyers dominated in both, although agents have been surprised by the level of inquiry from external buyers in recent months.
Christchurch and Dunedin are the only major metros to record value growth in the last three months – 0.5% and 1.8% respectively. Both have relatively low average property values and many homes for sale in the first-home buyer bracket, which has cushioned them somewhat from market pressures. The more expensive metros are feeling the squeeze, as buyers retreat from the middle of the market.
At a suburb level, the biggest quarterly value jumps were in Tapanui, in Clutha (up 9.9% to $423,000); Hokitika, in Westland (up 8.8% to $471,000); and Mangawhai, in Kaipara (up 8.1% to $1.4m). However, the percentage of suburbs enjoying quarterly value growth has shrunk, from 88% at the end of January to 58% at the end of May.
The biggest dollar jumps in the last three months were in Whiteford (+$152,000); Mangawhai (+$105,000); and Redwood Valley (+$101,000).
New listings volumes remain elevated, giving buyers more choice and bargaining power than a year ago.
The total number of homes for sale on OneRoof.co.nz at the end of May was 19% above total listings a year ago, but down 3.89% on April’s tally. New listings volumes have also eased over the past month but are still comfortable up year-on-year (in Auckland’s case 45.4% up).
The loosening of the loan-to-value ratio (LVR) rules from July 1 is another plus for first-time buyers and will allow banks to do more low-deposit lending.
But there are challenges in the market. The Government has scrapped the first home grant scheme and the much-talked-about debt-to-income (DTI) ratio rules will come into force on July 1, tying the amount buyers can borrow more closely to their incomes.
The Reserve Bank has also warned that interest rates will stay higher for longer than previously forecast.
That could be a positive for first-time buyers, delaying the next lift in house prices and further reducing competition in the market.
Valocity figures show that first-home buyers’ grip on the market has slightly weakened. They represented 42.8% of all purchasing mortgage registrations in Q1 2024, down from 43.9% the quarter prior. The Q2 figures to date suggest their share has once again declined, to 42.4% (in context still higher than their share in 2020 and 2021).
The figures also show investors have started to return to the market, although not in large numbers. Their share of new mortgage registrations increased from 21.5% before the general election to 24.2% in Q1 2024, but Q2 figures suggest a small decline in activity.
However, the changes to the bright-line test, which take effect from July 1, may lead to increased investor activity and a small spike in listings as investors try to realise their gains.
- Click here to find properties for sale
