The housing market appears to be back on the path to recovery as the latest average home value was found to have risen by 0.9 per cent for the three months ending in August. This is according to Quotable Value (QV), whose House Price Index has remained largely unchanged in the quarter ending in September. With a housing market downturn that has persisted since late 2021, there is renewed hope that the tide is turning.
However, according to James Wilson, QV’s operations manager, the subtle increase is still well below the spring surge that is usually observed at this time of year. He acknowledged that there was some clearing out of old housing stock that had sat on the market for a while and hoped that there would be further momentum in listings once the election is over.
Derek Turnwald, QV property consultant, also said that the low volume of sales and market uncertainty were lingering issues. He, however, noted that local agents were seeing some heightened interest from investors who were likely being encouraged by the prospects of a new government with more favourable policies on holiday homes and investment properties.
First-time home buyers are reported to be the most active demographic, with some going beyond entry-level locations. This activity is surprising given the prevailing high interest rates and tight lending conditions. A resumption in record migration is also believed to have contributed towards higher demand.
The national average house value currently stands at $899,256. This is 6 per cent less than the same value reported a year ago and 4.8 per cent lower than at the beginning of the year. Some of the major urban centres that recorded positive growth in September include Invercargill which rose by 3.2 per cent, Auckland by 1.6 per cent, and Wellington at 1.5 per cent. New Plymouth was the only main centre amongst those monitored by QV that experienced a decline in value of 1.5 per cent.
As the general election nears, there are also concerns over what potential changes may be made as regards foreign property buyers. Doubts have been expressed over National’s projected tax income that would be derived from its proposed 15 per cent foreign buyers’ tax. The party estimates the tax would raise $740 million per year, which would come from the sale of less than 2,000 residential properties. Experts from QV and CoreLogic indicate that this may be an exaggerated projection.
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