Buyers are staying in hibernation according to QV which released new data on the market today. Photo / Fiona Goodall
Auckland house values have dropped for the past five months in a row and fell further in the latest quarter, Quotable Value says.
“Auckland led the reductions with a 2.6% average home value decline in the latest quarter. That is down from a 1.4% decrease in the previous index and marking five straight months of negative growth,” QV said.
Auckland’s average value is now $1,250,306.
Auckland house values fell -0.4% in February, -0.2% in March, -0.1% in April, -1.1% in May and a further -1.4 per cent in June.
Of the super city’s seven former local government areas, the largest average home value reduction in the quarter to June was in Manukau -3.6%, followed by Rodney (-3%) and Papakura (-2.7%). Only Franklin +1.9% had a higher average home value than at the start of this calendar year.
“The Auckland housing market is pretty flat generally, which is fairly typical during the mid-winter months anyway,” said local QV registered valuer Hugh Robson.
“Homes in popular locations, such as inner city and coastal suburbs, are selling better than less desirable areas,” he added. “Otherwise there are still quite a few townhouse developments with unsold homes.”
Barfoot & Thompson had 5736 available residential properties for sale by the end of June. Vendors are continuing to list, with 1506 places listed during that month with that agency which sold 681 places in June, down on the 916 sales in made in May. Yet average residential prices were $1.23m in June, up on the average $1.1m in May.
Centrix data reported on by the Herald last month showed the number of Kiwi consumers behind on their credit payments in April eased slightly to 458,000, down 5000 month-on-month. This was largely driven by lower vehicle loan and buy-now-pay-later arrears.
Mortgage arrears fell for the second consecutive month. There are now 21,700 home loans reported as past due (or 1.45% of all home loans), down 400 monthly.
However, mortgage arrears are still up 14% year-on-year. The proportion of loans 30-plus days past due is currently 0.71% – compared to 0.54% a year ago, Centrix said.
QV said house hunters were continuing to hibernate this winter, with national values dropping national 0.9% in the latest quarter.
“Frosty economic conditions continue to impede New Zealand Aotearoa’s now ice-cold housing market, causing home values to dip with the temperature in most main centres,” QV said.
The latest QV House Price Index shows home values decreased by an average of 0.9% nationally over the three months to the end of June.
That is a slightly larger rate of reduction than the 0.2% quarterly decline for May.
The average home value now sits at $916,285, 2.8% higher than last year and 13.9% or $147,480 lower than the market’s peak in late 2021, QV said today.
Tauranga and Palmerston North values are down 1.3% while Wellington values fell 1.2% in this quarter.
James Wilson, QV operations manager, said tough economic conditions were continuing to make it hard for potential buyers to save a sizeable deposit, get finance or service a mortgage.
Interest rates are around 7% and inflation is still biting, Wilson said.
“Many house hunters are in hibernation now until conditions improve, potentially on the other side of winter, maybe longer,” he said.
Wilson expects values to soften further this winter and in the months ahead.
“There’s currently nothing to suggest that house prices will take off again in the near future, while there’s everything to suggest that they will remain flat to gently falling. The recent shortening of the bright-line test will likely result in more listings coming onto the market, offering buyers even more choice and therefore keeping downward pressure on prices,” he said.
Even recent introduction of debt-to-income restrictions and the loosening of loan-to-value ratios were not expected to have any material effect in the short to medium term, particularly while interest rates remain at their current high level, he said.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
The financier wants $28.2m; unsecured creditors are listed as being owed another $167,000.