Residential Recovery Sluggish In First Quarter Of 2024

Residential property values have continued to gently rise and fall throughout the first quarter of 2024, amidst a glut of listings and an ongoing dearth of sales across much of New Zealand Aotearoa.

The latest QV House Price Index for March shows the average home value has increased nationally by 2.2% to $924,734 over the first three months of 2024 – a small increase on the 1.3% quarterly home value increase reported at the end of February. The average home value is now 1.9% higher than the same time last year and 13.1% below the market’s peak in late 2021.

Of the main urban areas we monitor, Queenstown experienced the most growth this quarter at 2.7%, with Wellington and Christchurch not far behind on 2% and 1.5% respectively. However, all three experienced less growth in this rolling three-month period than last, with Auckland (-0.2%) even experiencing a modest average decline for the second straight month.

QV operations manager James Wilson commented: “‘Flat’ remains the word of the year so far when it comes to the current state of New Zealand’s residential property market. We’re seeing only modest movement across the nation – mostly up, but some down – which is a fair reflection of a housing market that is continuing to find its footing again amidst some pretty strong economic headwinds.

“Although the pendulum has clearly swung in favour of prospective purchasers, with a relatively large number of properties on the market today giving them plenty of choice and helping to maintain downward pressure on prices overall, interest rates and credit constraints are continuing to make life very difficult for everyone.”

Despite a modest increase in the average rate of home value growth nationally, just three main urban areas recorded more growth in this QV House Price Index than in the last one – New Plymouth (2.1%), Palmerston North (0.6%) and Invercargill (0.7%).

“The recent influx of new listings on the market appears to have had more of a cooling effect within the main centres so far – most notably in Auckland, where home values have largely stalled in recent months. I expect to see this trend continue here and in some of our other larger cities over the next few months,” Mr Wilson said.

“Immigration is helping to fuel demand, so it’s still unlikely that we’ll see any strong value declines as we now start to move into the cooler months of the year. Of course, it’s also equally unlikely that we’ll see any sudden strong home value growth. Once again, ‘flat’ is the best word to describe the market today and its trajectory, even with the recent reintroduction of 80% interest deductibility for landlords.”

Northland

Home values are up across the wider Northland region by an average of 1.4% this quarter.

The average home value in Whangarei reduced by 0.2% to $734,482 in the three months to the end of March 2024, but is still 26.5% higher than it was four years ago at the outset of the Covid-19 pandemic in this country.

Meanwhile, the average home value in Far North District increased by 4.4% this quarter to $726,943, and it increased by just 0.1% to $861,912 in Kaipara.

Auckland

Auckland has posted a small reduction in average home value for the second month in a row.

The latest QV House Price Index shows the average home value decreased across the wider Auckland region by 0.2% to $1,283,155 in the March quarter, compared to a 0.1% average reduction recorded in the February quarter.

Of the Super City’s seven former territorial authorities, only Rodney (2.2%) and Franklin (3.2%) were in the red this quarter, with home values on the North Shore experiencing the largest average reduction at 1.6% for the March quarter.

The average home value in Auckland is still 1.1% higher than the same time last year, and 17.5% higher than at the outset of the Covid-19 pandemic in New Zealand Aotearoa four years ago.

Tauranga

The average rate of home value growth has slowed in Tauranga.

The city was one of the outliers in the previous QV House Price Index with average home value growth of 3.1% in the February quarter. In the latest index, that average rate of growth has slowed to just 0.5% throughout the March quarter.

Tauranga’s average home value is now $1,041,157, which is 1.3% higher than the same time last year and 31.2% higher than at the outset of the Covid-19 pandemic in New Zealand Aotearoa back in March 2020.

Waikato

Home value growth remains sluggish but largely positive across the broader Waikato region.

The latest QV House Price Index shows home values increased by an average of 0.7% across the Waikato region in the March 2024 quarter, with only Otorohanga (-0.8%) and Hamilton (-0.1%) experiencing small reductions on average.

The average value of a home in Hamilton is now 0.9% higher than the same time last year, and 22.1% higher than at the outset of the Covid-19 pandemic in New Zealand Aotearoa in March 2020.

Taranaki

The latest housing figures look far more robust in Taranaki this quarter than in many other regions of New Zealand Aotearoa.

The latest QV House Price Index shows the average home value increased in New Plymouth by 2.1% to $721,558 this quarter. That figure is now 0.5% higher than the same time last year, and 40.6% higher than at the same time four years ago, at the onset of the Covid-19 pandemic in this country.

Meanwhile, the average home value has also climbed 1.9% to $452,980 in South Taranaki this quarter, and climbed 3.9% to $505,867 in Stratford.

Hawke’s Bay

It was another mixed bag across the Hawke’s Bay region this quarter.

Residential property values reduced across the wider Hawke’s Bay region by an average of 0.3% this quarter, with the average home in Napier increasing by 0.6% to $757,904 but falling 1.4% in neighbouring Hastings to $781,697.

QV Hawke’s Bay manager Damian Hall commented: “The market is very flat here with a significant increase in listings over the past couple of months. As a result, buyers are in no rush as there are plenty of homes to choose from. Banks are still making it difficult to borrow, despite some of the major banks reducing their rates slightly.”

“It looks like we might be in for a quiet winter,” he added.

Palmerston North

Property values continue to edge upward in Palmerston North.

The average home increased in value by 0.6% to $646,150 this quarter – up slightly on the 0.5% quarterly growth recorded in the previous QV House Price Index. That figure is now 2.4% higher than at the end of March last year.

Local QV registered valuer Olivia Betts said home values had risen by an average of 3% in the past six months. “We would anticipate that this trend will continue – though possibly at an even slower rate.”

“We’re seeing a higher level of listings as agents aim to get their properties under contract before winter, which is historically a time where the market slows down,” she added.

Wellington

Wellington’s average rate of home value growth has slowed once more.

The latest QV House Price Index shows the region’s average home value increased by 2% to $875,392 throughout the March 2024 quarter – a slight reduction on the 2.5% average growth reported for the February quarter.

Once again, Kapiti (5%) has recorded the largest average increase in home value, followed by Upper Hutt (3.8%). Home values also increased on average in Wellington City (1.9%), Porirua (0.7%) and Hutt City (0.4%) but at a slower rate than the national average (2.2%).

QV senior consultant Blake Ngarimu commented: “Material value growth is being dampened by a healthy number of listings and high interest rates. The market continues to be dominated by first-home buyers trying to get into the market while values across the Wellington region are more affordable.”

Nelson

The average home value in Nelson has done little better than break even throughout the first quarter of 2024.

The QV House Price Index for March shows that the average home value has increased by 0.2% so far this year to $778,913 – down from the 1.2% average rate of quarterly home value growth reported in our February index.

Though stock levels remained high, local QV registered valuer Jane Simpson said there was currently only a relatively modest amount of investor activity in Nelson and Tasman. “Owner-occupiers are still the most active group in Nelson and Tasman today, with first-home buyers still very activity as well.”

“The market for residential properties priced between $800,000 and $950,000 remains steady. Properties in the higher price brackets are being negatively impacted by high interest rates, tight lending and the high cost of living.”

West Coast

Property values continue to grow at relatively rapid rate on the West Coast – with one exception this quarter.

Low sales volumes are still causing home value levels to fluctuate locally, with the average home value in both Buller and Grey District surging ahead by 7.4% and 7.8% respectively this quarter. Westland, meanwhile, experienced far more muted growth of 1.5%.

But even on an annualised basis, with a larger sample of sales evidence, the average home value in Grey District is 19.3% higher than the same time last year. In Buller, the average home value is 9% higher, and it’s 1.1% higher in Westland.

The average home value is $371,150 in Buller, $419,044 in Grey, and $448,026 in Westland.

Canterbury

The average rate of home value growth has slowed once more in Canterbury.

The latest QV House Price Index shows residential property values increased across the overall Canterbury region as a whole by 1.4% this quarter, which is down on the 2% growth on the quarter to the end of February, and 2.9% for the quarter to end of January. Annually, the average home value is 3.1% higher than at the same time last year.

In Christchurch, the average home value has increased by 1.5% to $763,993 this quarter, which is down on the 2.4% growth recorded for the quarter to the end of February. The city’s annual growth is shown as 3%.

In the wider Christchurch region, Selwyn District recorded an average quarterly increase of 0.6% and an average value of $834,522, down slightly on the 0.8% growth recorded in the February quarter. Growth in the Waimakariri District has also levelled out at 0.2% for the quarter and an average value of $714,072, down on the 1.3% quarterly growth recorded in the previous index.

Local QV registered valuer Rod Thornton commented: “We are seeing a reduction in construction actively and reported higher listings, with the high cost of living now appearing to be hitting harder and interest rates still high on the previous low levels that many buyers initially purchased on. While we cannot absolutely predict what the next few months will bring, signs are there may be some further slowing of the market and downward pressure on values.”

Otago

Residential property values have increased by an average of 2.3% this quarter in Otago.

It is a slower rate of quarterly home value growth than the 3.4% reported in our previous QV House Price Index, with every territorial authority recording less positive growth in this month’s index compared to last.

Waitaki (3.6%) experienced the largest amount of home value growth in the region this quarter; Central Otago (1%) experienced the least.

The average home value in Dunedin increased by 1.3% to $635,474, which is 0.3% higher than the same time last year. It is the first time the city’s average home value has been up on an annualised basis since June 2022.

Local QV registered valuer Rebecca Johnston commented: “Dunedin’s number of properties listed for sale has continued to rise into March, with the days to sell also on the increase compared to late last year. This highlights a loosening of supply versus demand, with it being firmly a buyers’ market.”

“However, real estate agents are reporting open home attendance dropping away and a reduction in multi-offer situations. This is to be expected due to the tapering off of the selling season,” she added.

Queenstown

Queenstown’s average rate of home value growth slowed this month.

The latest QV House Price Index shows the average home value increased by 2.7% this quarter to $1,826,238, down from a three-month rolling average of 4.2% in the previous index.

The average Queenstown home is worth 9.9% more than at the same time last year, and 46.3% more than four years ago at the outset of the Covid-19 pandemic in New Zealand Aotearoa.

Invercargill

Invercargill was one of the few main urban centres to record more home value growth in this index when compared to last.

The latest QV House Price Index shows the city’s average home value increased by 0.7% throughout the three months to the end of March – a reversal of the 0.5% reduction recorded throughout the three months to the end of February.

Invercargill’s average home value is $480,637, which is 6.3% higher than the same time last year.

QV registered valuer Andrew Ronald commented: “The latest figures indicate a continued strengthening in market conditions. There is healthy demand from first-home buyers, and investors are beginning to return to the market with the restoration of interest tax deductibility rules over the next two years.”

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