Christel Yardley / Stuff
National house prices are now back to their November 2021 level.
National house prices are now back to their November 2021 level, according to the latest QV House Price Index.
On a national average, home values fell 2.2% in the three months to the end of May. Year-on-year, they rose 10.5%, compared to an annual growth rate of 14% in April.
Auckland’s average value fell 3.3% in the quarter to $1.47 million. Wellington saw the largest quarterly decline, down 4.9%, while Hamilton was down 4.4%. Tauranga was down 0.7%.
In Auckland, the largest falls were in the central suburbs, down 4.5% over three months,
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Christchurch prices remained broadly flat, down 0.3% year on year. Queenstown Lakes and Marlborough were the only areas to see price increases in the quarter, up 4.5% and 1.1% respectively.
Local property consultant Olivia Brownie said prices asking developers of house and land packages on the outskirts of Christchurch were starting to become more “realistic”.
QV chief executive David Nagel said there was no doubt house prices were falling nationwide and buyers were gaining the upper hand in negotiations.
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“It’s really just a matter of how many more values will drop before finding the new equilibrium.”
He said the market spike was driven by investors and first-time home buyers competing for limited inventory, fueled by low interest rates.
“This has led to massive increases in the value of the most affordable locations, so it’s no surprise that these are the first values to be hit. But as the market downturn sets in, even the most affordable properties more expensive ones have started to be affected now.
He expected further weakness, with interest rates set to rise further, as well as uncertainty caused by the conflict in Ukraine and supply chain disruptions.
“We are unlikely to see significant growth in value until at least 2023, when fully open borders could allow tourists and immigrants to return to New Zealand to pre-Covid levels.”
Hugh Robson, a registered appraiser in Auckland, said many auctions ended with no result and properties sold later, by negotiation.
“It seems that sellers are now realizing that the market is not what it was from June to November last year, and so they are now adjusting their price expectations in order to secure a deal to sell. “
Some developers were delaying the start of multi-unit projects due to material shortages and rising costs, he said.
In Wellington, Porirua led the fall in property prices, down 3.1% last month.
Over the past six months, Hutt City, down nearly 10%, had seen the largest drop in average home value, followed by Upper Hutt (-7.4%) and Porirua (-6%).
QV’s local lead consultant, Blake Ngarimu, said agents had reported that deals had failed and a surplus of listings were struggling to sell as higher interest rates made more difficult to service a mortgage.
“The fear of missing out is definitely gone and the fear of paying too much has definitely set in.”