New Zealand’s home value growth paused in April, with a slight 0.1 per cent decrease indicating uncertainty in the property market. According to CoreLogic’s House Price Index, the average property value in New Zealand is now $933,633, a 3 per cent increase from September’s low point, but still 11 per cent lower than the peak.
In the main cities, property values varied. Dunedin saw a 0.7 per cent increase in April, while Wellington and Hamilton experienced a 0.4 per cent growth. However, property values in Christchurch and Tauranga remained flat, and Auckland saw a 0.6 per cent decrease.
CoreLogic NZ’s chief property economist, Kelvin Davidson, suggests that the sluggish house price trends in April indicate a ‘buyer’s market’, where sellers have less bargaining power. He explains that while buyers need to have their finances in order, which is challenging with mortgage rates around 7%, there are not many ‘forced sellers’ due to the relatively low unemployment rate.
In Auckland, property market performance varied in April, with Rodney being the only area to see a slight increase. Auckland City saw a small decline, while Waitakere, Manukau, and Franklin saw decreases of 0.6-0.9 per cent.
On the other hand, Wellington’s housing market slightly strengthened, with Porirua and Upper Hutt seeing increases of 1.5 per cent and 1.4 per cent respectively. However, Davidson warns that significant public sector job cuts could potentially affect the housing market confidence in Wellington.
Outside the main cities, the housing market saw modest gains in April, except for Napier and New Plymouth which experienced mild declines. Rotorua stood out with a 1.3 per cent increase in average values.
Looking forward, Davidson expects the property market to see a modest upturn this year and possibly into 2025. He predicts that sales volumes might increase by around 10 per cent this year, and house price growth could be around 5 per cent in 2024. However, he notes that inflation and the Reserve Bank’s plans for the official cash rate will significantly influence the housing market performance in the coming months.
