Property News Summary

Key Facts

  • New Zealand’s average property value increased by 3.33% year-on-year to $975,000.
  • In the last three months, property values dipped 0.2% nationally.
  • Property values decreased quarter-on-quarter in Auckland, Bay of Plenty, and Gisborne.
  • Strongest house price growth observed in West Coast and Southland.
  • Christchurch and Dunedin recorded minor value growth in the last three months.
  • Tapanui, Hokitika, and Mangawhai saw the biggest quarterly value increases at the suburb level.
  • New property listings remain high, providing buyers with increased choice.
  • LVR rules loosening from July 1 favours first-time buyers.
  • Government scrapped the first home grant scheme; DTI ratio rules from July 1.
  • Interest rates are expected to remain higher for longer.
  • First-home buyers’ market share has slightly weakened, while investor activity has slightly increased.
  • Changes to the bright-line test from July 1 may lead to increased investor activity.

Article Summary

Property values in New Zealand have seen a modest increase of 3.33% year-on-year, pushing the average property value to $975,000. However, the latest data from the OneRoof-Valocity House Value Index also indicates a slight decline of 0.2% over the last three months, providing a more favorable landscape for first-home buyers. Regional variations exist, with Auckland, Bay of Plenty, and Gisborne experiencing a quarterly decrease in property values.

Interestingly, the country’s more affordable regions such as the West Coast and Southland have shown strong growth. Property values in these areas have seen notable increases of 4% and 3.4%, respectively. Christchurch and Dunedin have also recorded minor value rises, benefiting from their relatively lower average property values and higher availability of homes within the first-home buyer bracket.

Suburban areas like Tapanui, Hokitika, and Mangawhai have experienced significant quarterly value jumps, but the number of suburbs enjoying value growth has decreased since January. High new listing volumes mean buyers currently have more choice and better bargaining power. However, policy changes such as the scrapping of the first home grant scheme and the introduction of debt-to-income ratio rules from July 1 may pose challenges.

Despite these challenges, the loosening of LVR rules from July 1 is likely to benefit first-time buyers by allowing banks to offer more low-deposit lending. While the market remains tough, the higher interest rates may delay the next house price lift, potentially reducing competition. Investor activity appears to be on the rise, although the upcoming changes to the bright-line test might further influence this sector.

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