Housing market continues to slide, major cities worst affected

Auckland led declines in the housing market with a 2.5% drop, while Queenstown and Invercargill had modest gains. Photo / Getty Images

By RNZ

The housing market continues to go backwards, with major cities leading the declines, amid hopes that lower interest rates may spark some kind of recovery.

The latest Quotable Value (QV) report showed the national average home value fell 1.1% in the three months ended September to $900,521.

Values remained 0.2% lower than a year ago, and around 14.0% below the peak in early 2022.

Auckland led the market lower with a 2.5% fall to $1.19 million, followed by Whangārei, Hamilton, and Nelson, all around 1.7% lower, and Wellington falling 0.8%.

QV spokesperson Andrea Rush said buyers have the advantage in many regions.

“It remains a buyers’ market; however, deposit requirements and the ability to service mortgages remain barriers for many first-home buyers, and interest rates are still well above Covid-19 levels.”

She said lower prices were making houses more affordable in some regions, while there was a broad hope that lower interest rates would spark the market.

“Lower mortgage rates may encourage a modest rise in activity, but any rebound in prices is likely to remain constrained by the broader economic recession, cost-of-living pressures, rising unemployment, and ongoing global uncertainty.”

After last week’s RBNZ cash rate cut, most retail banks lowered the lending variable and fixed rates.

Rush said demand was strongest for modern, well-maintained homes that buyers could move in to, but multi-unit townhouses and apartments lacking storage, parking and other facilities were taking longer to sell and forcing sellers to cut prices.

A handful of regions were posting modest gains; Queenstown and Invercargill were the strongest with 1.8% and 1.6% respectively.

There were gains also in New Plymouth, Gisborne, and Hastings, and no change in Tauranga.

But reports from regional QV staff pointed to increased interest from potential buyers, and vendors in many areas needing to negotiate to try to get sales over the line.