Property Market Trends

Key Facts

  • Auckland’s house values decreased by 0.8% last month.
  • Nationwide average property values fell by 0.2% last month but increased by 1% over the year, reaching $931,438.
  • House values in other cities: Wellington down 0.6%, Tauranga down 0.5%, while Christchurch, Hamilton, and Dunedin saw modest increases.
  • Regulatory changes and high mortgage rates have contributed to market uncertainty.
  • High stock of listings is shifting bargaining power towards buyers, tempering prices.
  • Potential increase in listings due to change in the brightline test from 1 July.
  • Job security remains a concern, affecting housing activity and prices.
  • Provincial markets show mixed results, with migration issues potentially impacting property values.

Article Summary

The latest report from CoreLogic indicates a decline in house values across New Zealand, with Auckland experiencing the most significant drop of 0.8% in the past month. Nationwide, the average property value fell by 0.2%, though it registered a 1% increase over the past year, reaching $931,438. Cities like Wellington and Tauranga also saw a decline, while Christchurch, Hamilton, and Dunedin noted minor gains.

CoreLogic NZ’s chief property economist, Kelvin Davidson, pointed out that several regulatory changes, including the abrupt removal of first home grants and modifications to loan-to-value banking restrictions, have contributed to market instability. Despite anticipated tax relief, high mortgage rates are expected to maintain pressure on the market. The notable inventory of property listings has changed the dynamics, giving buyers more leverage and suppressing price growth.

The upcoming shortening of the brightline test from 1 July could further influence the market by making around 50,000 properties exempt from capital gains tax, although not all these properties are expected to be put up for sale. Job security concerns persist, underscored by the impact of elevated interest rates, though the robust labour market has helped borrowers manage thus far.

Outside the main urban centres, the housing market also exhibited varied trends, with some regions like Whanganui, Rotorua, and Queenstown seeing modest value increases, while Invercargill, Hastings, and Nelson experienced declines. Migration patterns, particularly younger people moving overseas, may be impacting property values in these provincial areas, adding another layer of complexity to the market outlook.

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