PHOTO: The latest QV House Price Index highlights a 2.1 percent average increase in home values over the three months ending October. FILE
The real estate market is displaying encouraging signs of revival nationwide, despite sluggish sales and challenging economic circumstances. The most recent Quotable Value (QV) House Price Index, released on Tuesday, suggests a gradual upswing in residential property values for the third consecutive month. The resurgence is notably fueled by first-time homebuyers in more affordable regions.
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According to James Wilson, QV operations manager, this recovery is extending into major urban centers, ascending the property ladder, and encompassing higher-value segments. Although caution prevails among most individuals, Wilson notes a subtle shift in mindset amid ongoing economic challenges.
Interest rates and credit constraints continue to impede progress, yet a growing vitality is observed throughout the country. Post-election, interest in property acquisition is on an upward trajectory, particularly as the market approaches its peak selling season. The scarcity of new listings compared to surging demand is contributing to upward price pressures, accompanied by a hint of FOMO (fear of missing out).
The latest QV House Price Index highlights a 2.1 percent average increase in home values over the three months ending October. Notably, Auckland, Wellington, and Christchurch are experiencing significant gains, with Auckland’s average home value rising by 2.7 percent.
Despite these positive trends, Wilson emphasizes a cautious outlook, predicting the housing market to remain “flat to gently rising” in the foreseeable future. He attributes this projection to the prevailing economic headwinds but acknowledges the potential for increased investor activity with a more certain political landscape.
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The regional breakdown reveals varied performances:
Northland: Home values increased by an average of 2 percent, with Far North District and Kaipara leading the way. Whangārei experienced a modest improvement after a previous reduction.
Auckland: The residential property market in Auckland is gaining momentum, with a 2.7 percent increase in the October quarter. The Super City’s former territorial authorities recorded positive growth, attributed to increased investor and first-time buyer activity.
Tauranga: The city’s residential property market is showing signs of recovery, with a 1.1 percent increase in the October quarter. Real estate agents anticipate heightened interest in the coming summer months.
Waikato: Hamilton’s residential property values stabilized, with a marginal average reduction of 0.2 percent. The regional market, excluding South Waikato and Waitomo District, largely bottomed out.
Rotorua: Residential property values in Rotorua increased by an average of 1.4 percent, signaling improvement from the previous quarter’s reduction.
Taranaki: New Plymouth experienced a 2.8 percent decline in average home value, in contrast to neighboring Stratford and South Taranaki, where values increased.
Hawke’s Bay: Napier and Hastings are slowly recovering, with home values increasing by 1.7 percent and 2.4 percent, respectively. Wairoa experienced a small decline.
Palmerston North: The average home value increased by 1.6 percent, indicating a slight upward trend after a period of stagnation.
Wellington: The greater Wellington region saw a 2.5 percent increase in average home value, with positive growth recorded across all local council areas except Upper Hutt.
Nelson: Residential property values in Nelson rebounded by 0.4 percent in the October quarter, breaking a pattern of decline in 2023.
West Coast: Property values in Buller District and Westland increased, while Grey District recorded a modest decline. Overall, the West Coast fared better than the national average.
Canterbury: The residential property market in Canterbury is recovering, with an average increase of 1.9 percent. Christchurch experienced a 1.8 percent rise in average home value.
Otago: Dunedin posted its first positive quarter since late 2021, with a 0.7 percent increase in residential property values. The wider Otago region also saw positive growth.
Queenstown: Residential property values in Queenstown increased by 1 percent, contributing to a slight annual gain compared to the national average decline.
Invercargill: Invercargill recorded a modest 0.4 percent increase in home values, signaling a halt in the previous downward trend.
These diverse regional trends collectively paint a nuanced picture of the New Zealand housing market, reflecting both challenges and opportunities in different areas.