Interactive: Has your suburb dodged the house price slump?

The nationwide average property value dropped 12.3% ($134,000) year-on-year to $958,000 - only $20,000 above where it was at the end of April 2021, according to the latest data from the OneRoof-Valocity. Photo / Fiona Goodall

The downturn has knocked New Zealand house prices back to levels last seen two years ago, but competition for new listings is cushioning the market from further blows, new OneRoof figures suggest.

The nationwide average property value dropped 12.3% ($134,000) year-on-year to $958,000 - only $20,000 above where it was at the end of April 2021, according to the latest data from the OneRoof-Valocity House Value Index.

Auckland’s average property value tumbled 14.8% ($227,000) year-on-year to $1.308 million while Wellington’s fell 22.2% ($250,000) to $874,000 over the same period.

Prices in both regions are below where they were two years ago - $35,000 in Auckland’s case and $112,000 in Wellington’s.

West Coast, the country’s most affordable property market, is the only region where prices have continued to defy the slump, with its average property value up 8.6% ($34,000) year-on-year to $430,000.

However, the speed at which prices are falling around the rest of the country is slowing, and in some cases the decline has even reversed in the last quarter.

Otago’s average property value was up 1.1% ($10,000) in the three months to the end of April, bouyed by an uptick in buying activity in Queenstown, while Canterbury’s average property value was down just 0.1% ($1000) over the period.

Of the 1108 suburbs with 10 or more settled sales in the last 12 months, 318 now have values below two years ago, with Oreintal Bay, in Wellington, suffering the worst of the downturn. Prices in high-end waterfront suburb are not only down 20.0% on May 2021 levels, but also 7.2% below pre-Covid levels.

Only 136 suburbs are up year-on-year, with Ohai, in Southland, recording the strongest growth. Its average property value jumped 14.6% over the last 12 months.

However, the figures also prices overall are 23.9% ($185,000) higher than they were in March 2020, just before Covid-19 struck.

Auckland property values are almost 17% ($187,000) higher than in March 2020, while Wellington values are 13.6% ($105,000) higher. Both regions have seen values declines of around 20% since market peak last year.

Canterbury’s average property value is up 42.4% ($225,000), even after a 5.4% decline since market peak.

Values in eight more regions are more than 30% higher than in March 2020, while Nelson is the only other region joining Auckland and Wellington with growth of less than 20% over the three years.

Valocity senior researcher Wayne Shum said that the OneRoof-Valocity House Value Index figures indicated the market was stabilising, although further drops could not be ruled out. “Values are either growing or are falling at a much slower rate than they were during the worst of the slump in the second half of last year.”

Shum said that the rate of decline in Auckland had dropped from nearly 5% in September to 2.6% at the end of April, while in Wellington the brakes were on hard, with the rate of decline dropping from 10% to 2.4% over the same period.

Hamilton’s rate of decline had gone from a peak of 4.5% to 1.5%, while in Christchurch and Dunedin it was close to zero. Queenstown was the only major metro where values are growing (up 1% in the last quarter) while Tauranga’s rate of decline was still stubbornly high at above 4%.

OneRoof editor Owen Vaughan said a shortage in new listings was limiting the impact of the downturn. “While total stock is up 17% year-on-year, new listings for April are down 18%. In the worst-affected regions, buyers are competing for more than a third fewer new listings than a year ago. Taranaki and Waikato are the only regions to see a lift in new stock,” he said.

“Fewer new listings mean more competition for quality stock that’s been priced in line with current market expectations. Already, we’re seeing this in the auction rooms, where bidding is back to boom levels for well-finished homes.”

Shum said that the numbers showed there was still uncertainty in the market. “The post-holiday drop-off in January was more severe than in 2021 and 2022, while the expected February and March lift was significantly down on previous years, reflecting the deep challenges facing the housing market.

“The low unemployment level continues to underpin the property sector and so far there has not been an increase in mortgagee sales. There has, however, been a slight increase in the share of resales at a loss.”

Shum said that the 50 basis point lift in the official cash rate at the start of April had been a warning to banks not to lower mortgage rates, and despite the surprise drop in the annual rate of inflation to 6.7%, interest rates were likely to remain at current levels for much of the remainder 2023.

Owen Vaughan editor for OneRoof. Photo / Supplied

“The annual rate of inflation is still high, and it will be some time before it returns to the targeted range of between 1% and 3%. Homeowners should expect another lift in the OCR on May 24, with the Reserve Bank having already flagged a peak rate of 5.5%.”

Shum said there was still a large number of homeowners due to refix their mortgage rates this year, from 2-4% to 6%-plus.

High interest rates, at levels not seen in more than a decade, will continue to curb buyer appetites, but the recent proposal from the Reserve Bank to loosen the rules around deposits for owner-occupiers and investors could alter negative sentiment, Shum said.

“While it is true first-home buyers have increased their share of new mortgage registrations to 42.7% in March – up almost 5 percentage points year-on-year – the actual number of registrations fell 11% to just over 2400 over the same period,” he said.

“Investors’ share of purchases also lifted year-on-year, from 23% to almost 27%, but with low sales volumes it is too early to establish whether they are re-entering the market.

“The announcement from the Reserve Bank that it is looking at from June 1 easing the loan to value ratio (LVR) rules for borrowers could give buyers extra incentives to re-enter the market.”

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