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New Zealand’s average house price has increased and values through 2024 are tipped to increase slowly and steadily, however, recent growth rates have seen a “slight stalling”.
The latest Quotable Value (QV) house price index showed property prices increased by 0.6 per cent throughout the December quarter. It puts the average value at $905,070.
In Auckland, values increased by 1.9 per cent from the three months to the end of December. This left the average property price there at $1,285,521. This growth rate was lower than the 2.8 per cent seen in the November quarter.
The nationwide growth rate, meanwhile, was down from the 2.3 per cent increase reported over the three months to the end of November.
QV’s operations manager James Wilson chalked the slower growth rate up to an increase in new property listings and stock available for purchase.
Wilson said: “The slight stalling in the rate of home growth nationally could well be a result of the increase of stock available for purchase, which came to the market throughout the last few months of the year and allowed supply to balance demand in some key markets, thereby suppressing competition.”
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Even with increasing prices late last year, Auckland’s average house price at the end of 2023 was 4 per cent lower than it was at the beginning.
In the December quarter, the North Shore saw the strongest growth with a 4 per cent increase in prices, while Papakura was the only area in the city to see prices fall in the same quarter, down 1.1 per cent.
Across the country, Rotorua saw the highest growth with a 6 per cent increase in prices through the December quarter and Tauranga was next with a 3.3 per cent increase. New Plymouth saw the smallest increase of any town with growth at 0.4 per cent.
The Government says its resource management reforms should help tackle New Zealand's housing crisis - particularly in major centres struggling with growth. Photo / Nick Reed
Local QV registered valuer Meghan Crowe said of growth in Tauranga: “Tauranga’s average home value has now increased slightly for the third month in a row, which indicates that the market has stabilised now.”
She said, “Tauranga’s population continues to grow, which brings with it fresh demand for housing. Though high mortgage rates are likely to continue to impact buyers and owners.”
QV’s index showed Wellington experienced 2.4 per cent growth and Christchurch saw 2.5 per cent growth.
The year ahead
QV’s Wilson said the latest data showed how volatile value trends could be.
“With relatively low sales volumes in many markets across the country it doesn’t take much change in activity to change the overall value performance,” he said.
Quotable Value operations manager James Wilson. Photo / Fiona Goodall
On the impact of new listings, Wilson said: “In the short term, this influx of new listings should result in market activity increasing throughout January and February.
“Competition among those buyers who couldn’t find their next property in 2023 will remain in place to some degree, but this will likely be subdued over the first couple of months of 2024 as it’s met by an increase in stock available.”
Wilson said he expected property values over the next few months to continue to strengthen at similar levels as the last quarter of 2023.
“High net migration remains in place, increasing demand and putting pressure on the rental market, and the expected reintroduction of interest deductibility for property investors will also certainly impact the housing market,” he said.
In Auckland, values increased by 1.9 per cent from the three months to the end of December. This left the average property price there at $1,285,521. Photo / Alex Burton
“However, the biggest handbrake to home value growth right now is interest rates, which are expected to remain at current levels throughout much of 2024 as the Reserve Bank looks to reduce stubbornly high inflation levels.
“While many buyers and sellers remain relaxed to the impacts of climate change and natural hazards on their properties, the winds of change are beginning to blow, so watch this space in the year ahead.
“The nationwide land risk classification framework that is currently being assessed across the country also has the potential to significantly and quickly change the housing market in higher risk areas.”
Raphael Franks is an Auckland-based reporter who covers breaking news. He joined the Herald as a Te Rito cadet in 2022.
