The first cash rate cuts in more than four years have slowed New Zealand’s house price decline but the market is still under pressure, with the latest OneRoof-Valocity figures showing value drops across much of the country.
The nationwide average property dropped 0.7% to $957,000 in the three months to the end of October. The decline was smaller than the three-month drop of 1.1% recorded at the end of September, suggesting the market has finally found the floor.
An end to this year’s slump will boost the confidence of homeowners, who have suffered seven successive months of falling prices, and raise hopes that the Reserve Bank’s decision to cut the Official Cash Rate – to 5.25% in August and 4.75% in October – will kickstart growth.
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Falling mortgage rates are already having an impact on buyer activity. Since the first OCR cut in August, enquiries on OneRoof have risen almost 20% while agents have noted more people at open homes and increased bidding at auctions.
OneRoof editor Owen Vaughan said: “House prices have yet to benefit, though, with the latest OneRoof property value figures showing continued declines nationwide. That is unlikely to last, with increased competition among buyers and a sense we’ve really reached the bottom this time set to put upward pressure on values.”
However, homeowners expecting strong price growth in the closing months of 2024 should temper their expectations, Vaughan said. “Economic indicators are weak and the unemployment rate will continue to rise in 2025. Debt-to-income ratios will also start to take effect, limiting the amount buyers can borrow.”
Figures from the OneRoof-Valocity House Value Index point to a comeback for the housing market. Six regions recorded quarterly value growth, up from five at the end of September.
West Coast and Southland – two of the country’s cheapest regions for property – were up more than 1%, but the 0.1% lift in Canterbury to $782,000 is more significant for the overall market. The region is New Zealand’s second largest for sales and has held up well across all price points.
OneRoof editor Owen Vaughan says the 2024 slump is reaching its endpoint. Photo / Fiona Goodall
House prices in Auckland – the country’s biggest housing market – are still under pressure, but the rate of decline has eased. The region’s average property value dropped 0.8% ($10,000) in the three months to the end of October to $1.279 million, down from the quarterly drop of 1.7% at the end of September and 2.6% at the end of August.
Still dropping but at a slower rate are property values in Wellington (-1.9% to $863,000) and Northland (-2.2% to $815,000). Both regions have been hit hard by the winter slump, with low sales and falling values particularly acute in Kaipara, in Northland, and Carterton and Wellington City, in Wellington.
Softness in the holiday home market has thrown Northland off course while public sector job losses have added to the challenges in Wellington.
At a major metro level, only Queenstown-Lakes was up, although the pace of value growth in the country’s most expensive district for real estate has slowed, from almost 3% at the end of August to 0.9% at the end of October.
Values in Christchurch and Hamilton were down by just a fraction (-0.3% and -0.4% respectively) over the last three months, but values in Dunedin dropped 1% – a surprise after the city’s brief period of stability. Tauranga was also down, by 1.3%, while Wellington City’s average property value is 2.8% ($28,000) lower than it was at the end of July and 5.7% ($58,000) lower than at the end of April.
The tentative turnaround could be seen in the OneRoof-Valocity suburb value figures. The average property value grew in a third of the suburbs covered by the index, up from less than 25% of suburbs at the end of September.
West Coast suburbs recorded the strongest growth, with Runanga, in Grey, up 8.3% ($23,000) to $301,000, although values in two of the country’s richest areas – Lake Hayes and Arrowtown, in Queenstown-Lakes – were also up sharply, 7.6% and 3.5% respectively, or $198,000 and $98,000.
The biggest quarterly losses were in the Far North, with 12 suburbs in the Northland district recording value drops of more than 5%. Karikari Peninsula was hardest hit, dropping 12.4% ($97,000) to $686,000, closely followed by Paihia (-10.1%), and Russell and Kaikohe (both down 8.5%).
The biggest value drops were in the Ashburton suburbs of Netherby and Allenton (down 11.5% and 7.9% respectively), but also feeling the squeeze were two high-profile suburbs on Auckland’s lifestyle fringe. Whitford’s average property value dropped 7.6% ($276,000) to $3.41m while Coatesville’s tumbled 7.4% ($271,000) to $3.38m.
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