House prices down more than 10% | CORELOGIC NZ - Property News AU/NZ | propertynoise.co.nz & propertynoise.com.au

PHOTO: House prices keep falling. FILE

Once again, house prices have experienced a decline as the imposition of higher interest rates continues to restrict demand for properties.

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According to the most recent house price index from CoreLogic, property values witnessed a 1.2 percent decrease in June, marking a 10.6 percent decline from the same period last year. This decrease is more substantial than the 0.7 percent drop observed in May, which translated to a 10.2 percent decrease compared to May of the previous year.

Auckland primarily drove the monthly decline in June, with a significant drop of 3 percent for the month. In fact, four out of the six main centers recorded larger falls during this period, as highlighted by CoreLogic.

Nick Goodall, the Head of Research at CoreLogic, noted that this latest data might pose a challenge to the notion that the housing downturn had already come to an end. However, the varied outcomes across the country support the argument that the housing market’s lowest point is approaching.

Goodall emphasized the importance of evaluating the key market drivers and recent changes to these drivers when forming expectations about the market’s future direction, rather than fixating on the precise timing of its bottom.

Despite the recent downward trend, the average house value still stands $183,000 higher than the pre-Covid level in March 2020. However, it has dropped by $130,000 from the market’s peak.

Goodall highlighted the weakness in the flow of properties listed for sale throughout the year, which has consistently remained below the levels seen in the previous three years. This, coupled with an increase in property sales, has resulted in an overall reduction in the volume of properties available on the market.

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He further explained that reduced supply, along with the influx of more migrants, increased confidence, relaxed credit requirements, and near-peak mortgage rates, have supported recent demand. However, Goodall did not anticipate a strong rebound in prices.

He stated that stretched affordability, primarily due to high property values and interest rates compared to recent history, is likely to restrain demand. As a result, once the market reaches its bottom, it is expected to stabilize and achieve a more balanced state.

Here are the average house values compared to a year ago, according to CoreLogic: