PHOTO: QV house price index – Sept 2023 Photo: Supplied
In August, the average cost of a home in New Zealand increased by 0.5 percent to reach $893,639, marking the first rise in national average house prices since late 2021. Quotable Value operations manager James Wilson pointed out that this increase was primarily driven by first-time home buyers in the lower end of the market, who have remained active and are supporting the market’s stability.
Wilson mentioned a shift in the mindset of buyers, indicating a return to a more positive outlook. However, he cautioned that this does not necessarily signify a significant rebound, but rather a trend towards a relatively steady or slightly positive market for the next three to six months.
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Despite this increase, many areas have not yet returned to their pre-pandemic price levels. Some regions, such as Wellington, have seen a 20 percent reduction from their peak values, with year-on-year growth still down by just under 10 percent.
Certain areas with strong entry-level competition, including parts of the Mackenzie country, wider Canterbury, Westland District, and Queenstown Lakes, have seen prices return to levels observed before the onset of the COVID-19 pandemic.
Wilson noted that investors and typical homeowners have taken a cautious approach, but there is a gradual shift in their mindset due to the expectation that interest rates are unlikely to significantly worsen and will probably remain stable. This change in perspective has led some of them to consider entering the housing market.
However, Wilson also mentioned a decrease in new listing numbers in the past four to six weeks. While some areas, such as Tauranga, Marlborough, Christchurch, Queenstown, and Invercargill, have seen modest increases in property values this quarter, most main urban areas have experienced ongoing declines.
The QV House Price Index reveals that the rate of reduction over the last three months has slowed in Auckland, Wellington, and Palmerston North, while other areas like Whangārei, Hamilton, Rotorua, New Plymouth, Napier, Hastings, and Dunedin have seen slight increases or less than a percentage point decrease in property values.