Winter has deepened the chill across New Zealand’s subdued housing market, with average home values falling across most of the country.
The latest QV House Price Index shows residential property values reduced by 1.5% nationally throughout the three months to the end of July, as the modest momentum recorded earlier this year continued to fade.
The average Kiwi home is now worth $898,799, down 1.3% since the start of the year and 1.2% less than the same time last year.
QV national spokesperson Simon Petersen says the market remained patchy, but the winter slowdown had become more widespread as buyers grew increasingly cautious.
“The regional divide we highlighted last month is still evident, but there are fewer bright spots now. Winter has put a further chill through the market, while the prospect of higher borrowing costs and ongoing economic uncertainty have given buyers even less reason to rush,” Petersen says.
Across our largest cities, Christchurch (0.3%) continues to hold its own, while residential property values weakened in Auckland (-2.2%) and especially Wellington (-3.2%) this quarter. Only the former’s average home value is higher than at the start of this year.
Tauranga (0.7%) has quietly outperformed much of the North Island this quarter, while Canterbury and Southland have largely resisted the broader national trend once more.
“Tauranga has been one of the North Island’s most consistent performers this year, proving that buyers are still willing to compete where the fundamentals stack up. That’s also what we’re continuing to see across much of Canterbury and Southland.
“These markets are benefiting from their own mix of affordability, employment and supply-and-demand conditions. It’s another reminder that there is no one-speed housing market in New Zealand right now, and conditions are not playing out evenly everywhere.”
Elsewhere, average home values have generally drifted lower, although Petersen cautioned against reading too much into the larger quarterly movements recorded in some of New Zealand’s smaller centres.
“Markets such as Gisborne and Greymouth can fluctuate more sharply because fewer sales have a greater influence on the index. The longer-term trend is often more meaningful than any single quarterly result,” he says.
More broadly, Petersen says winter conditions were combining with wider political and economic uncertainty to keep the market subdued.
“This isn’t another sudden correction. It’s an already subdued market losing what little momentum it had built earlier in the year.
“There is still activity, particularly from first-home buyers, and well-presented, realistically priced homes are still selling. But we’re seeing very little urgency now. With the general election looming late this year, many prospective buyers appear content to sit on the sidelines and wait for greater certainty.
“Until that happens, we expect buyers to remain cautious and the market to continue moving at different speeds across the country.”
