Buyers were also paying less for homes due to high interest rates making repayments unaffordable for many and with so many properties on the market at the moment they have choice and negotiating power.
“In that context, it’s not surprising at all to see that transactions are taking longer and vendors are having to give some ground to secure a sale,” Davidson said.
“Overall, the second half of 2024 could prove to remain challenging for the property market.”
However, Davidson said there were small shoots of change in the market, notably the general mood about inflation being more under control and talk of cuts to the Official Cash Rate.
“With the Reserve Bank now moving towards an easing stance, it only seems to be a matter of when – not if - the cash rate is cut in 2024,” he said.
“Mortgage rates themselves have already been drifting lower lately. That news will, obviously, have been welcomed by existing mortgage holders and aspiring buyers.”
ANZ economists in their July Property Focus report expected house prices to fall a further 1% this year.
However, they then predict prices to jump 4.5% over 2025 and 5% through 2026.
Davidson said the silver lining to the current tough market for sellers was the opportunities it was providing first-home buyers.
“Aspiring first-home buyers will no doubt be pleased with that situation - plenty of choice and flat house prices are already helping this group to maintain a record high share of activity,” he said.
Auckland: Prices down in every part of the city
Auckland’s typical house value is now 20% lower than the record highs it hit during the Covid-pandemic boom.
And the recent house price falls have spread to every district of the Super City, with Waitākere prices dropping furthest as they are down 3.3% over the past four months to a median $943,239.
Auckland City, Manukau and Papakura have all fallen 2.9% over the last quarter, while the North Shore is down 2.3%. Rodney is down 1.7% and Franklin has dropped 1.4%.
CoreLogic’s Davidson said the same pressures keeping house prices down elsewhere in the country were also acting as a drag on Auckland prices.
However, Auckland also had two unique features. The first was that prices were already so much higher than many other regions, buyers found it a stretch to be able to buy in the city.
Secondly, the city has been the centre of the recent townhouse construction boom and some of these developments are still being finished and coming onto the market, further boosting the number of properties for sale and giving buyers greater choice, Davidson said.
National and main centres
Wellington was the main centre with the biggest house price falls over the past quarter, with prices falling 2.7% compared to national prices dropping 1.9%.
That’s led Wellington’s median home value to $837,425, or 21% lower than prices during the Covid boom.
Tauranga has fallen the next furthest, with a 2.3% quarterly drop taking its median value to $925,166, while Hamilton with a 1.9% drop to a median value of $737,011 endured the third-biggest decline.
Dunedin prices, meanwhile, have fallen 1.4% to $609,004 and Christchurch 0.7% to $691,888.
Davidson said Wellington’s price falls had been the “most striking”.
“No doubt some savvy buyers will be eyeing up opportunities for property bargains around the wider Wellington area, given that values remain significantly below the previous peaks,” he said.
“That said, planned reductions in public service employment remain a compelling reason for caution about the Wellington market in coming months.”
