How much house prices dropped in 2024

By Susan Edmunds of RNZ

New Zealand’s median house value dropped by $32,200 in the year to December, Corelogic says.

Property values fell 0.2% in the month of December, the ninth drop in the past 10 months.

It took them to 3.9% lower than a year ago and 17.6% below the post-Covid peak.

But values are still 16.2% higher than in March 2020.

In the month of December, Hamilton prices rose 1%, Tauranga’s by 0.4% and Dunedin’s by 0.3%.

But Auckland’s fell 0.4% and Wellington’s 0.7%.

Corelogic chief property economist Kelvin Davidson said the large number of properties for sale in Auckland, both existing properties listed for sale and the flow of new builds, was keeping prices soft.

In Wellington, housing affordability had been restored after two or three years of “significant” falls in values, he said. “As such, the latest declines seem more attributable to public sector cutbacks and the negative effect this will be having on economic and housing market sentiment across the wider region.”

Corelogic chief property economist Kelvin Davidson. Photo / Peter Meecham

Over the year, Auckland prices were down 6.2%, Tauranga’s 3.8% and Wellington’s 6.5%.

Davidson said prices had been drifting lower at a modest pace since a mini-peak in February.

That reflected higher mortgage rates and weakness in the labour market, he said.

“December’s mild drop was simply a continuation of that pattern and sums up the market’s soggy performance in 2024.”

But he said the rate of decline had slowed recently which could signal the floor was not far away.

“We’re still seeing some sluggish results in Auckland and Wellington, but firmer trends seem to be starting to emerge elsewhere.

“That would certainly be consistent with the influence of lower mortgage rates, particularly the falls for the internal serviceability test rates at the banks. The popularity of either floating loans or short-term fixes at present is helping those lower rates pass through fairly quickly too.”

But he said job insecurity would still hold back the market, as would high numbers of properties for sale.

“These ‘conflicting forces’ may remain a key theme for the property market in 2025 as well, with the effects of lower mortgage rates dampened to some extent by a still-sluggish economy and credit restrictions in the form of debt to income ratios (DTI).”

Property values fell 0.2% in the month of December, the ninth drop in the past 10 months. Photo / Alex Burton

Smaller centres had stronger house price performance in December.

Over the year, Whangārei’s prices are down 5.6%, Gisborne’s 8.9% and New Plymouth’s 2%. Napier, Palmerston North, Whangārei and Nelson all had increases in December.

“It’s early days, but we may now be seeing the influence of lower mortgage rates starting to come through providing a subtle boost to property values around some parts of provincial NZ,” Davidson said.

“Housing affordability can sometimes be more favourable in these areas too, alongside the solid support provided by farming-based economies, which have been holding up relatively well lately.

“However, a sudden or strong upturn in property values across large swathes of the country still doesn’t seem particularly likely until the wider weakness of the labour market starts to turn around.”

He said he expected value to lift 5% across the country this year, which was a relatively subdued recovery compared to past cycles

“The recent falls in property values may well come to an end shortly, but one factor for the year ahead that the market hasn’t had to contemplate before is likely to be the effect of debt-to-income ratio rules. These may not be a factor for everybody and won’t stop mortgage lending dead in its tracks. But by the middle of the year it certainly wouldn’t be a surprise if the DTI limits are a very common part of the general discussion around NZ’s mortgage market.”