Key Facts

  • The housing market across New Zealand is showing signs of recovery with residential property values slightly increasing for the third consecutive month, largely driven by first-home buyers particularly in the more affordable areas.
  • Property values are beginning to recover in the largest urban areas despite challenging economic conditions and low sales.
  • The latest QV House Price Index indicates an average home increased in value by 2.1% over the quarter ending October, improving from the 0.9% rise noted at the end of September.
  • Three out of 16 main urban centres recorded home value reductions in the quarter: Whangarei (-0.4%), Hamilton (-0.2%) and New Plymouth (-2.8%).
  • Auckland, Wellington and Christchurch experienced some of the largest gains, with home value increases of 2.7%, 2.5%, and 1.8% respectively.
  • The housing market is expected to remain flat to gently rising in the foreseeable future.

Article Summary

The New Zealand housing market is reflecting increasing recovery signs according to new data, despite the challenging economic conditions and relatively low sales. The Quotable Value (QV) House Price Index released recently, reveals a consecutive third month of slight increase in residential property values, mainly propelled by first-home buyers targeting relatively affordable areas. Recovery trends are also spreading into the major urban areas, although economic constraints are causing continued caution.

The report suggests interest rates and credit limitations still act as deterrents. Nonetheless, there’s growing interest in property buying, and as we move into the traditional peak selling season, some purchasers are looking to secure property ahead of anticipated price increases. This growing demand is outpacing the number of new listings, adding upward pressure on prices.

The latest data from QV shows a 2.1% increase in average home values over the three months to end-October, higher than the 0.9% increase in the quarter ending in September. Though three of sixteen main urban centres saw reductions in average home values this quarter, large cities like Auckland, Wellington, and Christchurch had some of the largest gains.

Despite this positive trend, the housing market is expected to stay flat to slowly rising due to economic pressures. Influenced by the change in government, some investors are likely to become more active in the coming months, potentially increasing competition and pressure on house-prices, especially in more affordable areas and places with record migration. But with high-interest rates and credit constraints still in place, a significant return of investors is unlikely.

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