Wellington home sellers might be feeling a little brighter this month after the region's house prices rose for the first time in 17-months. Photo / Supplied
Wellington home sellers might be feeling a little brighter this month after the region's house prices rose for the first time in 17-months. Photo / Supplied
Wellington house prices have jumped for the first time in 17 months while Auckland values are stabilising, all but confirming the housing market’s slump is ending just ahead of spring’s traditional selling season.
That’s according to property analysts CoreLogic, whose latest House Price Index showed Wellington prices crept up by 0.3 per cent in July compared to a month earlier.
While the rise is small, it’s the first time since March last year that Wellington prices - now averaging $892,906 - have increased from one month to the next.
Meanwhile, Auckland prices - now averaging $1.3 million - fell 0.6 per cent compared to June.
CoreLogic chief property economist Kelvin Davidson said the small fall showed “hints of a turnaround” because five of Auckland’s seven sub-districts either rose in value or held steady.
“Generally speaking, the ‘next phase’ of the cycle could still be relatively muted, given that affordability remains stretched and mortgage rates aren’t set to drop anytime soon.”
Should New Zealand house values flatten out or begin to rise again, it would mark the end of a dramatic market slump that roughly dates back to November 2021 - around the time most regions reached record-high prices during the last boom.
In Auckland, prices have now spiralled 17 per cent below the record highs they hit in 2021, while New Zealand-wide prices are down 13 per cent and Wellington values have dropped 22 per cent - the most of anywhere in the country.
Auckland's housing market has been caught in a year and a half long slump but the data is showing that could now be over. Photo / Alex Burton
Yet while the falls are big, the speed they are dropping has been steadily slowing in recent months, CoreLogic data shows.
That can be seen in the Auckland region where prices have fallen 12 per cent over the past year, 4 per cent over the past three months and now just 0.6 per cent in the past month.
When the Auckland region is broken into its sub-districts, the changing pattern is even more obvious, Davidson said.
That shows house prices rising in Papakura (up 3.9 per cent), Manukau (up 0.6 per cent) and North Shore (up 0.3 per cent), holding steady in Franklin (flat at 0 per cent) and Waitakere (down 0.1 per cent), and only falling in Rodney (down 1.4 per cent) and Auckland City (down 1.6 per cent).
Perhaps because Auckland and Wellington values had fallen further from the record highs of the boom than other main centres, they are the first to start rebounding, Davidson said.
“It’s early days for the Wellington market, but the fact that values previously dropped so significantly suggested that it could be among the first areas to bounce back and lead any recovery too. That dynamic might have just started to play out in July’s result,” he said.
Davidson said overall the number of homes up for sale in the market had been dropping, while the number of houses sold had been gently increasing.
“This is likely starting to result in the re-emergence of competitive price pressures,” he said.
A range of other factors indicate that house prices were unlikely to keep falling dramatically, including mortgage rates reaching what most believe are close to their peaks, an easing of Government lending rules that now makes it easier for banks to give loans to home buyers, high employment figures and a solid flow of migrants into New Zealand.
Owen Vaughan, editor of property website OneRoof, agreed that a shortage of new homes going on sale was helping to stabilise prices.
“Tight listings of homes for sale, especially in Wellington where new listings are down 35 per cent year-on-year, are putting upwards pressure on property values,” he said.
“Less stock means there is a lot more competition for homes and that agrees with what we have been hearing from real estate agents saying they are getting multiple purchase offers on houses and up to 50 groups attending open homes.”
In Q2 2023, owner occ movers accounted for 26% of property purchases in NZ. More active than first home buyers but still well below the long-run movers average of 29%.
Outside Auckland and Wellington, house prices in the other major cities Hamilton, Tauranga, Christchurch and Dunedin followed similar patterns in which prices all fell by between 0.2 and 0.3 per cent.
