First annual fall in average home values in 11 years - QV | WATCH - Property News AU/NZ | propertynoise.co.nz & propertynoise.com.au

PHOTO: NZ house prices are falling. GETTY

New Zealand’s average home value has recorded its first annual reduction in more than a decade, according to the latest figures from Quotable Value

QV said it’s the first annual home value reduction since June 2011, marking nine straight months of declining home values nationally.

Home values have slipped by an average of 2.1% nationwide in the 12 months to the end of September 2022, QV’s latest House Price Index shows.

The average home decreased in value by 5.4% nationally in the three months to the end of September, just 0.1% better than the rate of quarterly decline reported at the end of August.

The national average value now sits at $956,592 – 9.2% lower than at the start of this calendar year.

General manager David Nagel said the Reserve Bank’s decision last week to raise the Official Cash Rate by a further 50 basis points “all but ensures that the path we’re on will continue for the foreseeable future”.

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“Interest rate rises, credit constraints, the increasing cost of living – it’s a sure-fire recipe for declining home values,” he said in a media release.

“Plus there are still new houses coming onto the market up and down the country, putting further downward pressure on prices almost everywhere.”

QV’s figures show home values have slipped by 2.1% nationwide in the 12 months to the end of September (Source: Breakfast)

Nagel said the downward trend “will be worrying news for people looking to sell their homes, as well as those who purchased at the peak of the market now concerned about negative equity”.

“The exceptional house price increases throughout 2020 and 2021 have impacted affordability and impeded access to the property market for most New Zealanders.

“This market correction, as painful as it is for some, will hopefully afford others an opportunity to get into the market in the future. Though it’s still very tough out there for prospective first-home buyers, they’re now gaining the upper hand when it comes to negotiations.”

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QV said across the main centres, Queenstown “once again stands alone” with 0.2% in quarterly home value growth. It said the others continued to “succumb to tight credit conditions and rising interest rates”.

Auckland

In the country’s largest city, home values declined by an average 2.4% in the 12 months to the end of September 2022. This was down on the 1.1% in the last house price index. QV said there had been eight straight months of negative home value growth, including by an average of 5.8% over the last three months.

The average home value is now sitting at $1,358,710.

Waikato

QV said Hamilton slipped into negative annual home value growth for the first time in a decade.

It said the city’s average home value dropped by 2.4% in the 12 months to the end of September 2022, including a 2.5% reduction in the most recent quarter.

QV remarked it’s the first time since August 2011 it’s house price index has shown an average decline in home value over a year-long period.

Hamilton’s average home value is now $841,089.

Tauranga

Tauranga also recorded negative annual growth for the first time since September 2011, with home values dropping an average of 1% in the 12 months to end of September 2022. There was also a 7.7% loss in the most recent quarter.

The city’s average home value is now $1,078,431 – well above the national average home value of $956,592.

Wellington

In Wellington, home values fell by an average of 3.1% last month. Quarterly, the rate of decline is at 9.6%.The region’s annual rate of negative home value growth is now at 14.2%.

The average home value – $903,259 – is now 16.9% lower than at the start of the calendar year.

Christchurch

QV said the average home value in Christchurch reduced by 0.6% last month, marking five straight months of negative growth.

The average home value is now $764,150.

QV remarked the city’s residential housing market continues to demonstrate a greater degree of resilience than Auckland or Wellington, with its “rosy” annual rate of home value growth of 8.8%.