- New Zealand house prices rose 0.7% ($7000) in three months, ending seven months of decline.
- Auckland’s average property value increased 0.9%, reversing a 3% drop in July.
- Nine regions, including West Coast and Northland, recorded value gains, while Wellington City prices continued to fall.
New Zealand house prices recorded their first sustained period of growth in more than seven months, with falling interest rates finally taking effect.
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New house price figures released by OneRoof and its data partner Valocity showed the nationwide average property value climbed 0.7% ($7000) in the three months to the end of November.
The rise ended a streak of falling property values that began in May this year and brings the price tag of a typical New Zealand home up to $963,000.
The figures show three-monthly value rises in two-thirds of the country’s 16 regions and all but one of its major metros.
The biggest turnaround was in Auckland, where the average property value was falling at a rate of 3% at the end of July but is now up 0.9% on three months ago.
The Reserve Bank of New Zealand’s action on interest rates has given the housing market a much-needed leg-up, OneRoof editor Owen Vaughan said.
“Buying a house has rapidly become less arduous since August when the RBNZ cut the Official Cash Rate for the first time in more than four years,” Vaughan said.
“Cuts in October and this week have brought the OCR to 4.25%, its lowest level in two years. This has led to a mortgage price war among the big banks, which have aggressively reduced their own rates to secure a larger share of the market.”
Vaughan said the rise in property values and house sales in the last three months indicated buyers were feeling increasingly confident about the future of the market, and wanted to act now before prices ran away from them.
OneRoof editor Owen Vaughan: “Cheaper home loans and relatively low prices should continue to support buyer activity, but affordability is still an issue for many Kiwis and the economy is still trying to find its feet." Photo / Fiona Goodall
“The spike in the number of houses for sale on OneRoof over the same period points to renewed confidence among sellers,” he said.
“And while you’d think the unfortunate end to last summer’s rush to market would have curbed any fresh appetite to list, feedback from agents suggests vendors are more realistic about price this time around and keen to make a deal.”
Vaughan said that continued weakness in the economy would restrain price growth in 2025, with fresh rounds of job losses and a pullback in retail spending highlighting the challenges still present in the market.
“Cheaper home loans and relatively low prices should continue to support buyer activity, but affordability is still an issue for many Kiwis and the economy is still trying to find its feet. Expect price growth to remain modest in 2025.”
Regions on the rise
Nine regions recorded value gains in the three months to the end of November. The strongest rise was in the country’s cheapest housing market, West Coast, where the average property value inched closer to the half-a-million-dollar mark with an increase of 2.6% ($12,000) to $476,000.
Also surging ahead were property values in Northland (+1.5%), Hawke’s Bay (+1.3%), and Waikato (+1.2%). The three regions were among seven in the figures to record their first quarterly price gain since at least July (although in Auckland’s case, the upturn marks an end to seven months of sliding house prices).
Property values collapsed in Marlborough, Nelson, and Tasman over the same three-month period, which suggests volatility and buyer uncertainty are prevalent at the top of South Island.
While property values in Bay of Plenty and Wellington were also down, the rate of decline in both has slowed, from 1.5% to 0.1% in Bay of Plenty and 3.2% to 0.7% in Wellington.
On an annual basis, values in six regions were up, with West Coast on top, with growth of 11.5% ($49,000). West Coast’s five-year growth figure is also worth looking at. The region’s average property value has jumped $192,000 (67.6%).
That’s close to Auckland’s five-year tally of $211,000 – which means those who bought in West Coast five years ago have enjoyed almost the same value gain as Auckland buyers but for less than a third of the outlay.
Major metros
The average property value in every major metro bar Wellington City increased over the last three months. Hamilton is back from the dead and leading the pack with growth of 3.1% ($25,000). The city, which had suffered price declines of more than 2% in July, is benefitting from its proximity to Auckland and its ability to offer first-home buyers and investors slightly more affordable prices.
The next biggest rise was in Queenstown-Lakes. The tourist hub has enjoyed a strong run of big sales this year, with agents revealing to OneRoof this month a clutch of $10 million and $20m-plus deals at the top end of the market.
The house price decline has been arrested in Auckland’s former council districts. Rodney has jumped ahead, with three-monthly growth of 1.7%, but also enjoying a solid spring lift are North Shore (+1.5%), Manukau (+1.3%), and Papakura (+1%).
Prices in Wellington City are still falling but the slump appears to be nearing its end point. The capital’s housing market is suffering on three fronts – rising unemployment, high council rates and high prices - so lower interest rates are having only a marginal effect.
Hot and cold suburbs
The number of suburbs that have turned the corner on the slump has grown. At the end of October, a third of suburbs with 20 or more settled sales in the previous 12 months were up over the quarter. At the end of November, the share of growth suburbs had grown to 45%, although a year ago the share of growth suburbs was almost double that.
Runanga and Cobden, in West Coast’s Grey district, recorded the strongest growth in the three months to the end of November. Runanga’s average property value jumped 7.8% ($22,000) to $305,000, while Cobden’s was up 7.5% ($23,000) to $328,000. Both suburbs are to the north of Greymouth and offer housing that’s up to $200,000 cheaper.
West Coast dominates the list of growth suburbs, with relatively low prices compared to other parts of the country a strong pull factor.
Low prices are a feature of the list of falling suburbs. Wellington Central ($464,000), Te Aro ($713,000) and Mataura ($314,000) would all seem relatively affordable to major metro buyers but have plunged between 5% and 7% in the last three months.
Dollar-wise, the biggest risers and fallers of the last three months are at the upper end of the market. Arthurs Point ($1.61m), Mount Eden ($1.7m) and Jacks Point ( $1.76m) all dropped between $65,000 and $86,000, while homeowners in Omaha ($2.77m), Point Wells ($2.37m) and Saint Marys Bay ($2.91m) were up by $79,000-$91,000.
