In Auckland the drop in average values of $99,227 is almost double that of the rest of the country. The percentage drop is 6.4%.
Over the three months to June QV’s HPI shows the average value of all New Zealand homes is now sitting at $1,011,188, dropping 3.4%, while in Auckland the average value is now $ $1,441,941, falling 4.1% over the three month period.
These values still show 7.2% and 7% average annual growth respectively, but down on the 10.5% and 9.9% growth in May.
QV’s data shows Wellington and Napier had the biggest three-month value drops with falls of 6.6% and 5.4% respectively. Nelson and Hamilton, at 5.2% and 4.7% reduction in values respectively, are not far behind.
Only one of the 16 major urban areas QV monitors has shown an increase in three-monthly house price value, with Queenstown-Lakes defying the downward trend with 1.9% home value growth for the quarter.
The housing marker is still continuing to feel the heat from rising interest rates, although mostof he major banks have pulled back their two-year fixed interest rate this week after raising the week previously, and a recent surge in listinging.
Credit constraints are limiting the number of new buyers entering the market and a combination of newly completed developments and existing property being listed for sale means there’s significantly more sellers than buyers, which is putting downward pressure on prices.
QV general manager David Nagel says just six months ago the national market was tracking at just under 30% value growth a year. This has fallen back quite dramatically, down to single figures, with further drops inevitable over the coming months as the home value correction continues.
“A 3.4% reduction over a three-month period doesn’t sound like much when considering the gains over the previous couple of years, but when looking at the fall in value throughout the first six months of this year, it becomes a lot more significant, particularly if buyers bought at the peak of the market late last year.”
Nagel says the most buoyant markets from 2020-2021 were the first to show a dip in prices, as evidenced by the six-monthly change data.
Palmerston North’s home values have come back on average 6.9% during the first six months of the year, with Hamilton values also hit hard at 6.4%.
The Wellington region also had big increases throughout 2020-2021, but is now showing an average correction of 8% for the calendar year. Auckland values have come back 5.6% in the same period.
Across the regions, Canterbury is showing the most resilience. Although growth is tapering off, Canterbury still recorded an average value increase of 20.9% since this time last year. The Taranaki region is also still showing strong annual growth at 15.5%, with Northland not far behind on 15% annual growth.
“All eyes will be on the next Reserve Bank OCR announcement as interest rates are expected to rise further to counter inflationary pressures,” says Nagel.
He says while prices are retreating across the country, the increase in borrowing costs means debt servicing and credit availability remain key stumbling blocks for new buyers to the market.
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