PHOTO: FILE
House prices experienced a pause at the close of 2023, with a modest uptick anticipated in 2024. According to the latest Quotable Value House Price Index, home values showed incremental increases in all major urban centers under observation, though the growth remained subdued. Nationally, the average home value inched up by 0.6 percent during the December quarter, reaching $905,070. This marked a decline from the 2.3 percent quarterly increase reported at the end of November.
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Among the main centers, Rotorua (6 percent) and Tauranga (3.3 percent) recorded the most substantial growth in home values on average during the December quarter. The larger cities also experienced marginal growth, with Auckland (1.9 percent), Wellington (2.4 percent), and Christchurch (2.5 percent) showing modest increases. Conversely, New Plymouth registered the smallest average increase at 0.4 percent.
Quotable Value – January, 2023
James Wilson, the QV operations manager, highlighted the volatility in value trends, attributing it to the current market conditions and relatively low sales volumes across the country. While October and November witnessed increased property demand, December saw a slowdown, possibly due to people waiting for the summer months to list their properties.
Wilson anticipated increased listing activity in January, potentially influencing market dynamics. He expected a gradual strengthening of home values in the coming months, followed by a slowdown in the autumn. Factors contributing to this outlook included sustained high net migration, pressure on the rental market, and the anticipated reintroduction of interest deductibility for property investors. However, he identified interest rates as a significant constraint on home value growth, with expectations of them remaining stable throughout much of 2024.
Real estate agents shared insights into regional trends. In Rotorua, despite the notable increase in value, December was relatively quiet. Steve Lovegrove, principal of Professionals McDowell Real Estate, noted a slower December following a more active October and November. He attributed this to a common situation where property transactions were contingent on previous sales in a chain, creating a sequential need for sellers.
Rachel Dovey, director of Bayleys Canterbury, highlighted the positive start to the new year after a period of hesitancy in December. She mentioned a surge in property appraisals and submissions, signaling increased interest in entering the market. While the market’s confidence was slower to rebound after a change in government, the new year brought optimism, with expectations of stable prices and a return to normal transactions. Sale prices in Canterbury were noted to have remained steady compared to some other regions.
SOURCE: RNZ