Auckland property prices plummet, losing nearly $300,000 in value

PHOTO: Auckland, New Zealand. FILE

Auckland‘s Housing Market Shows Declining Values, with Average Home Prices Down by $282,647 Since Last Year

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As of Tuesday, June 13th, 2023, at 12:15 PM, according to the latest QV House Price Index, the average value of homes in New Zealand’s largest housing market, Auckland, has experienced a significant drop of $282,647 since the beginning of last year.

The report reveals that nationwide, the average home value has fallen by $174,835 from its peak at the start of last year. Over the past three months leading up to May, there has been a decline of $13,671 in average house values, resulting in an average property value of $888,930 across the country.

This figure reflects a 13.7% decrease compared to the same period last year, yet it remains 20.2% higher than the pre-Covid-19 level. While value drops have generally stabilized around 3% across the country in recent months, James Wilson, QV operations manager, cautions that it is premature to conclude that the market has reached its lowest point.

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In the 11 out of 16 largest urban areas in the country, including Auckland, Hamilton, Christchurch, and Wellington, the rate of home value decline has slowed during this quarter. Notably, Wellington’s decline rate has even dipped below the national average for the first time since the market downturn began, standing at -2.6%.

Wilson suggests that although the downward trajectory of the residential property market has eased slightly in the past two months, there may still be increased volatility in the coming months. He emphasizes the need for a sustained period of softening and low sales volumes before confidently asserting that the market has bottomed out.

Wilson also notes that when the market does reach its lowest point, the recovery may not be uniform. Some locations and property types may experience growth sooner, while others may remain stagnant or continue to decline.

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Among specific areas, Queenstown Lakes experienced the largest value drop between April and May, with an average decrease of $18,380. This is surprising considering the previous three months had seen growth of 2.4% in Queenstown, making it the only district in the country with ongoing average growth.

Tauranga also witnessed a significant decline last month, with average values dropping by $11,311.

In Auckland, the rate of home value reduction has been slowing down for the past three months. In May, the region saw a marginal decrease of only 0.3%, resulting in an average home value of $1,258,521. This represents an improvement compared to the 0.5% loss in home value the previous month, as well as the average monthly reductions of 1.5% and 2.5% in March and February, respectively.

Hugh Robson, a local QV valuer, reports that the Auckland market has remained relatively quiet in recent weeks, but the rate of price decline appears to be moderating. This could potentially indicate that the market is reaching its bottom point. Robson also highlights that high mortgage rates and the prospect of refinancing at higher interest rates, combined with depreciated property values, pose challenges for homeowners who purchased properties in the past two to four years.