Figures from Quotable Value (QV) show that the average price of a New Zealand home has fallen by an estimated $10,000 a month. The QV House Price Index indicates that property values fell by $10,006 between December last year to January 2023. Prices also fell by $129,004 from January 2022 to January 2023. This makes for a national average annual decline rate of 12%.
The impact was felt more strongly in certain markets like Wellington which saw average house prices fall by $222,749. Auckland and Tauranga also declined substantially by $220,355 and $143,668 respectively.
The only major urban region that saw an increase in value is Queenstown-Lakes which rose by $89,788 over the last year. The area may however see a reversal of fortunes as house values appear to have declined by 0.6% during the last quarter of 2022. First-time home buyers in this market are facing an uphill battle as the median purchase price stood at $1.135 million in the first half of 2022.
According to an independent economist, Benje Patterson, besides pricing and salaries in Queenstown-Lakes not keeping up with house prices, there is also the problem of heightened competition as buyers flock in from not just other Kiwi centres, but also major Australian cities like Sydney and Melbourne.
As the price on properties that have sat on the market for long periods declines, QV is reporting that open home attendance has risen. Buyers have also become bolder and are increasingly making offers below the asking price in an attempt to secure bargains.
QV COO, David Nagel, has said that despite the downward trend across the country, it did not appear like the market had hit rock bottom yet. He noted that prospective buyers appeared to be acting with caution and wanting to wait and see how far prices might fall. He also highlighted other challenges such as difficulty accessing financing and an unwillingness to make such financial commitments at a time of high economic uncertainty.
QV’s figures appear to reflect a similar report from the Real Estate Institute (REINZ) which indicated a 13.7% annual decrease in the national value of residential properties for 2022. REINZ CEO Jen Baird said that this was a good time for buyers as there was more stock to choose from, less competition, and an easing in house prices.
Baird however noted that buyers may not have it so easy with interest rates likely to keep rising and banks being more careful of their finances. She also pointed out that sellers needed to be more realistic on pricing and timing expectations given the more choices and cheaper pricing available to buyers.
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