Extreme weather events in Northland not helpful as house values fall

Quotable Value (QV) chief operating officer David Nagel says it looks as though the housing market hasn’t hit the bottom yet.

Extreme weather events across the top of the North Island have done nothing to halt a slow decline that saw home values reduce nationally by an average of 1.1 per cent in January.

Quotable Value (QV) chief operating officer David Nagel said home values in flood-stricken parts of Northland, Auckland and Bay of Plenty were likely to recover “fairly quickly” generally, but the record amount of rainfall had been yet another obstacle for potential buyers and sellers to deal with at a time when house sales were at an historic low.

”It’s hard enough that people are already grappling with rising interest rates, inflation, and a still increasing cost of living,” Nagel said.

“Now many people in the upper North Island have been having to deal with cleaning up after some pretty extreme weather.

“It’s little wonder that it’s been a slow start to the year for the residential property market – I’d suggest it’s probably going to stay that way for a while yet.”

Northland has endured an especially wet start to 2023 – but unlike other areas, was showing some pockets of home value growth to start the year.

The average home value increased by 1.3 per cent to $751,413 this quarter in the Far North District, and by 1.7 per cent to $888,086 in Kaipara.

Meanwhile, Whangarei’s average home value has dropped 1.8 per cent since the start of November last year to $773,525 in QV’s latest figures.

Nagel said as a result of the tumultuous market and weather, he was fairly confident the market had not yet hit rock bottom.

“It seems many prospective buyers are being very cautious right now, waiting to see exactly how far prices will fall,” he said.

“Others are finding it too difficult to obtain finance, or are unwilling to make such a commitment given the very high level of economic uncertainty right now.

“So it looks as though this summer will probably continue to be a relatively quiet one for the residential property market for the time being at least, especially by recent standards.

“I certainly hope it’s at least a sunnier one than it has been so far for many of us.”