Cancer treatment backlog breaching patients' rights, green light for more migrants to get residency and history made at the Cabinet table in the latest New Zealand Herald headlines. Video / NZ Herald
The downturn in the residential property market is gaining momentum, with home values recording their largest first-quarter fall in more than 15 years.
The latest QV House Price Index for March indicated national property values fell an average of 3.9 per cent since the start ofthe year, following a 2.7 per cent drop in the three months to February and a 1.7 per cent drop in the three months to January.
The average home value fell 13 per cent to $907,737 on the year earlier.
“In less than a year, the average home value has fallen from $1 million nationally to just a tick over $900,000 today,” QV national spokesman Simon Petersen said.
The rolling three-monthly rate of fall increased last month in all but two of the country’s 16 largest urban areas, with the largest quarterly home value reductions in Whangārei (-6.6 per cent) and Rotorua (-5.7 per cent).
Of the largest cities, Auckland (-5.2 per cent), Hamilton (-5.2 per cent), and Wellington (-4.8 per cent) led the decline.
Christchurch (-1.2 per cent) and Hastings (-2 per cent) were the two exceptions - the former experiencing the smallest decline of the main centres.
Peterson said the first quarter of the year was usually one of the busiest periods.
“Traditionally, you don’t see too many home value declines this time of year,” he said.
“But it’s obviously a tough time right now for prospective buyers, who are having to deal with very significant credit constraints amidst an ongoing cost of living crisis.”
He said sellers were also finding it tough, with plenty of stock available but fewer active buyers than normal.
Housing stock is available but there are fewer active buyers than normal. Photo / Getty Images
“Interestingly, real estate agents are reporting significant falls in new listings across the motu, which is an indication that most vendors are trying to tough it out until the market improves.”
He said the national average home value looked destined to see further falls, given the Reserve Bank’s recent 50 basis point hike to the official cash rate - raising it to 5.25 per cent.
“There’s still a possible recession looming large on the horizon, even more mortgage repricing to come, and no small matter of an election later in the year.”
Big city investors on the sidelines
Auckland valuer Hugh Robson said the Auckland market was particularly quiet.
“Flood and cyclone events have certainly contributed to this, but activity was low even before these events,” he said, adding that credit constraints and higher interest rates were putting off many prospective buyers.
“Investors remain quiet ... Healthy Homes legislation and the issue of interest deductibility continues to keep them out of the market for now.
