The average value of New Zealand homes is down more than $100,000 so far this year, and almost $200,000 in Auckland and Wellington.
According to the QV House Price Index, the average value of NZ homes was $951,040 at the end of October, down $113,000 since the start of the year.
QV says housing values are continuing to decline throughout the country with the average value declining by 3.9% over the three months to October. In the main urban areas the decline in average values over that time ranged from -0.1% in New Plymouth, to -6.8% in the Wellington Region.
Queenstown-Lakes was the only region to go against the trend, with the average value there increasing by 2.9% over the three months to October (see the chart below for the full regional figures).
So far this year the national average value has declined by $113,000, with the biggest decline of $198,000 or 18%, occurring in the Wellington Region, followed by Auckland -$193,000 or 12%, Tauranga -$129,000, Hastings -$112,000, Palmerston North -$112,000, Napier -$110,000 and Hamilton -$95,000 or 11%.
Those figures and the current rate of decline suggest that by end of this year, average dwelling values in Auckland and Wellington could have declined by more than $200,000 during 2022.
"The traditional spring upswing in the residential property market hasn't amounted to much more than a small speed bump this time around, with few pockets of true home value growth to speak of and only a relatively small decline in the market's downward trajectory these past two months in a row," QV Chief Operating Officer David Nagel said.
"But we have certainly seen a seasonal surge in the number of properties coming on to the market, as spring is often seen as a good time to sell, with longer days and summer looming large on the horizon.
"This has kept downward pressure on prices, especially as interest rates have also risen and are expected to climb further to stifle inflation.
"This year couldn't be much more different to the last one for much of Aotearoa New Zealand.
"At the same time last year the QV House price Index was showing an average home value increase of 22.2% throughout the first 10 months of 2021.
"Now it's showing an average decline of 9.7% over the same period.
"I can't think of two more starkly contrasting consecutive years in my long career as a registered property valuer," he said.
Nagel said he thinks prices will remain soft for some time.
"Though the average rate of decline has slowed somewhat in recent months and it may even continue to slow as summer approaches, increasing volumes of listings are giving purchasers plenty of choice and the upper hand when it comes time to negotiate," he said.
"And with interest rates trending upward, no-one is going to willingly service a larger mortgage than they have to.
"This will likely have a dampening effect on the market for a good while yet," he said.
The comment stream on this story is now closed.
- You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.
109 Comments
Interesting Queenstown Lakes is still bucking the trend. I wonder how long it'll last for, especially if unemployment ticks up and the economy slows right down into a recession. A lot of debt over there to keep perceptions up.
Actually maybe the opposite. A lot of the high end stuff gets bought by people with much lower mortgage requirements than your average owner, they're paying with cash.
But as a guess maybe later next year, if the economy croaks people get more conservative.
Agreed. The uber rich are buying big parcels of land and building their retirement pads
Also, Queenstown is influenced more by the cost of building than most districts as so many of the houses there are new.
Interesting Queenstown Lakes is still bucking the trend. I wonder how long it'll last for, especially if unemployment ticks up and the economy slows right down into a recession. A lot of debt over there to keep perceptions up.
Don't be deceived by the limitations of the data. It's not difficult -- lower the sales vol, the lower the impact on these kind of indexes.
"So far this year the national average value has declined by $113,000, with the biggest decline of $198,000 or 18%, occurring in the Wellington Region, followed by Auckland -$193,000 or 12%, Tauranga -$129,000,"
I thought Carlos67 was claiming Tauranga was doing fine.
Its actually the 3rd worst in the whole country.
Even worse than the national average.
He might be in one of the beach suburbs. They are holding pretty well. We sold up in AKL and have been sitting on the sidelines here since May and Papamoa and the Mount have been selling consistently and frustratingly well. I imagine its the city suburbs that are taking the beating.
True, also another clown said prices would be down 30% in NZ by next month... 🤡
Considering the North Shore is already down -28.6% last month thats not hard to believe. Must be a lot of clowns around, maybe the Real Estate Institute is a circus .
Or maybe its time to wake up from DreamyYvil. If you leave it for to late it will be time to return to MiserYvil.
Within Auckland, six of the seven territorial authorities had annual price decreases, with the North Shore’s the largest at 28.6% (to $949,000).
Prices were down annually in seven of the region’s eight territorial authorities, but South Wairarapa’s dropped the most with a 27.5% fall (to $700,000).
Oh, you seem triggered? I wasn't talking about you, somone else made this silly prediction.
Anyway, glad you agree with me that even the handpicked single biggest falling suburb in NZ, is not down by 30%. The person who made that prediction was talking about a all of NZ.
Maybe you could copy and paste that below.
The prediction was vague. I believe it said something like "30% by Christmas"?
Because all the available data is lagging, we won't know the Christmas prices until around February or March 2023. Nellbell makes some interesting comments about unusual data lags just below.
It would pay to reserve judgment on the Prophet's prediction until then. There might be some surprisingly fast falls. We are in one of the fastest corrections ever.
Hey Future thanks for that. We are wanting to buy in South Wairarapa, it’s a very overpriced market, we think it still has a long way to drop.
It had huge price jumps fuelled by multioffer purchases post pandemic. Now actual sale prices are dropping, but suspect something is wrong with how agents are reporting this through to homes.co.nz - contrary to last year where every house price was declared as soon as the sale went unconditional, now they just are just TBA, with no price ever shown.
So homes.co.nz is showing continual rises month on month consistent with post covid increases. Other valuation websites are correctly showing price decreases. Houses all seem to be listing currently with homes.co.nz estimates in mind - agents telling us at the vendors request. The whole market has jammed up now with very few sales and growing listing numbers. Saw that a couple of expensive houses have dropped their price today.
Will be good to see new REINZ HPI data out soon, but small districts have 6 months rolling averages so are always a little smoothed, I guess at least it will all be data moving in a negative direction now.
Similar trend in Nelson although many vendors are simply not looking for another house until they know what will happen with their own currently, requiring longer settlement dates and the data is not bein reported until settlement. This will prolong the stats on the decreases in prices that are creeping down
There was a marked increase in the percentage of North Shore properties sold for under $1 million compared to the same time last year, contributing to the drop in median price.
You forgot to mention this about North Shore prices. Pretty sure this has been pointed out before, but it’s a total stretch to use median as a measurement of price drops. Guess it fits the narrative though.
Yvil, if not next month, do think that will be in near future.
Should be happy if it stops at 30% as we are in unchartered territory and even the most experience expert is not sure of what is happening and will happen.
One thing is for sure that will get worse before getting normal (not better as normal will be new better).
https://www.rnz.co.nz/programmes/the-detail/story/2018866002/the-mortga…
True, we are in rollercoaster and are about to witness the biggest and the steepest fall.
https://www.rnz.co.nz/programmes/the-detail/story/2018866002/the-mortga…
True, we are in rollercoaster and are about to witness the biggest and the steepest fall.
Reasonable narrative from Thomas Coughlan, but as always, the MSM narratives stop short at explaining why and how the bubble can exist. He either doesn't want to talk about credit creation or doesn't really understand the mechanism. It's kind of a dirty secret that it's mainly created out of 'thin air' is just another distributed ledger of debt obligations.
"even the most experience expert is not sure of what is happening and will happen."
Its uncertain times like these that people look for answers beyond the realms of the known.
I predict someone will come out and claim to be an all knowing prophet.....oh, wait a sec??
That clowns predictions have been more accurate than the rest of the circus.
Three months average so QT may be in decline in October, but offset by gains in the other 2 months. HPI out in 4 days and that will give a better picture of what is actually happening at the coal face.
In Auckland you would need to be earning around 400k to buy the average house from scratch, not many people earn that amount this will be a problem.
In life, I've learned it's better to avoid averages.
In Auckland you would need to be earning around 400k to buy the average house
Why?
What a ridiculous statement...
This bit is the ridiculous statement:
In Auckland you would need to be earning around 400k to buy the average house
You don't need to earn $400K to obtain a $1M mortage, and "average" house doesn't mean much.
I think Nifty1 is agreeing with you here as "why?" seems more of a question than a statement.
refactornz You must have a understanding financial matters read the post before you comment.
We could all read the post 10 times and it still wouldn't change the fact that you don't need to be earning $400K to buy an average house in Auckland.
According to the BNZ mortgage repayment calculator the repayments on a 1 million dollar mortgage are $74,784 a year fixed for 2 years.
Someone on 400k takes home $245,886.46 with a 4% kiwisaver contribution.
They're spending less than a third of their after tax income, they should be able to afford an average house comfortably.
Average price in Auckland for house is 1350k so income needs to be around 400k 3 x income you also need deposit thats why.
It doesn't 'need' to be 400k. There's plenty of FHB's every month getting into average homes. If it 'needed' to be, this wouldn't be the case. Try taking emotion out of your comments and realise what you want to happen doesn't mean it will. It's misleading at best.
You don't understand the word misleading until you hear a Property Brokers radio advertisement !
A good start.
Tauranga, ouch.
It seems only Queenstown can defy the laws of gravity…
I had a bit of a chuckle when I saw this. Apparently good times are just around the corner.
by Carlos67 | 8th Nov 22, 3:10pm
No definite uptick in the market down here in Tauranga, plenty of SOLD signs. Very seasonal market, prices down and people getting in before rates go even higher.
Is it fair to pick on the intellectually disabled?
Be kind.
Property as an investment makes no sense. You eat noodles for 30 years because of dumb debt levels as it’s a sign of success!?! go rent a place in a cheap country, work remotely, make money by having multiple streams of income. Only buy a house when you can buy cash… the only winner is the bank #debtslave young people are wising up to it and that’s going to be why prices will take a long time to recover from this. The bottom of the pyramid is vanishing
Property as an investment makes no sense ANYMORE.
It has been a wonderful way of making money for many, many years, but yes it has come to an end now, because it doesn't stack up cashflow wise.
What stacks up for you now? What are you recommending long term to replace property?
I hear you can make bank as an amateur arbourist these days.
😆👍
I thought Yvil might want to help our fellow readers make their own financial decisions. Apparently not.
I do, but not the cynical, sarcastic ones who love to make fun of others. Go figure out yourself how to invest your money.
So now that you've accurately described yourself, I can see why you're happy to come here to help yourself but not help others. Reads as somewhat "entitled" as an individual. Speaks volumes.
Come feeding time, do you wait in line?
I'm the one doing the feeding, and you will be at the back of the queue because of your nasty attitude.
I can tell you have an internally reinforced and superior sense of self importance, known as Narcissistic. Whatever floats your boat. Despite the way you treat others (including me), I'm more than happy to help you make financial decisions. Just read my comments :) I'm nothing more than a self confessed amateur.
You don't understand, I feed the homeless on Thursdays, (my wife cooks, I wouldn't subject anyone to my cooking, lol) you're welcome to come down if you're hungry, it's at the end of Lorne St, but please have a good attitude, everyone is friendly there.
OK, I'm trying to understand your sense of charity here. As a Landlord are you prepared to house those receiving benefits? I understand most Landlords see themselves as a provider of an essential social service. Could it be that perhaps you're suffering a sense of guilt from past behaviors?
by Yvil | 4th May 19, 4:02pm
I would never rent to beneficiaries, they're far too much trouble as tenants. If they can't look after themselves and need benefits, how could you expect them to look after someone else's house
As you understand Yvil, there is a little confusion as to your abilities to provide charity after passing judgement. Again, your sense of self superiority does shine through in your comments.
Can you cheat death too?
Always have to have the last word R-P? I'm still bitter that my useful and researched comments were deleted while these silly back and forth personal and off-topic debates are tolerated.
Any idea why they were deleted Dr Smith? I didn't see them.
The official story was that I was suspected of being an agent and had something to gain from my comments. I just like to study the auction sales and passed in properties with bids as a kind of hobby. I'm in IT in real life.
Zach, from what I saw, post having your REA marketing biased posts deleted you were then offered the services of the interest.co Marketing Department. Perhaps you would be happier in another forum? Anyway, I willingly take your comments onboard in the constructive way in which you no doubt intended. As you can attest, sometimes its hard to stay on topic when peoples personalities and passion for what they stand for shines through in their commenting.
I imagine Yves stands behind the workers singing.
"Laissez les paysans manger du gâteau"
Pardon my French
One day, I really hope interest.co.nz arranges an event because I want to see if you will all talk to each other like this in real life 😆 😝.How many years has this bickering been going on? It does amuse me so.
Maybe we could invest our money into HappYvil ?
Its a special forest with many trees.
Chop a bunch down and pick up an easy Mil Take a Chill Pill Yvil.
Yes the smart investors jump out end of last year the ones who did not see downturn coming are now scrambling.
It still makes sense if you invest into the right property but for sure the times of the easy money gravy train have come to an end.
However, that's not a bad thing!
Now investors can start working harder with their money and invest into productive businesses & new builds, home owners will have a a greater choice with less debt and affordability should be better once interest rates stabilise.
Mortgage (latin meaning) 'death pledge'.
Agree house ownership shouldnt be a priority for young pple. Instead find out what it is that you love to do.. your real passion. Lookout for others.. Find a way to get paid for it (always a way). and you will never need to work a day.
Everything else will fall into place.
House is just a place to live. Plenty of other options than owning one and being beholden for 30 yrs to a bunch of morally corrupt egoelites that dont enjoy what they do anyway (bankers and elite) and seem to want to inflict the same pain on everyone else.
Btw. Probably u will end up wealthy with a house anyway just enjoy getting there more.
French, not latin. Mort = death gage = pledge
House is just a place to live
Kaumatua Orr is on record saying houses are a consumption good. Many people weren't quite sure what that actually means.
I'd rather eat noodles for 30 years in my own home than in a Landlord's home.
Over those 30 years, my salary should increase which will reduce the debt burden over time, particularly with extra payments going against the principal amount. Meanwhile the rent is likely to increase somewhat inline with pay increases, unless we have a glut of rentals which is also possibility.
NZDan. You think you own the house. Miss 3 or 4 mortgage payments…then you’ll see who actually owns the house. Get yourself into trouble with the law…then you’ll see who actually owns the house
Easy. Don't miss the mortgage payments and don't get in trouble with the law.
The real question is how far they are going to drop ?
My guess is that this time next year we will be 2019 levels. But upcoming recession will drive it lower in 2024.
T Alexander has said once again this morning that he doesn’t expect mortgage rates to go much higher, and that there will be the start of a house price recovery second half of 2023.
You have a real fascination with TA, is he your hero? ; )
Yes I do have a fascination with him, and the media that holds him up as an expert. When he is so obviously biased. The media’s pro property focus is both fascinating and terrifying.
Do you still follow him? Do you think his commentary is convincing?
As I said to you before, I like his analysis in his Tview, I then draw my own conclusions, what he says doesn't matter to me. I also like to read/different view points, that's why I also read the Intetest comments section, as it's mostly anti property forum.
interest.co.nz comments are anti-property?! Hardly, try https://www.reddit.com/r/newzealand/ for comparison.
That's one of the most toxic places on the internet. Avoid.
I have made millions from property, I LOVE IT.
But any trader must have a view about short/medium/long term price trend in their choosen market.
Right now I see further falls, things are falling so fast (1.2-1.5% per month) that in another 18 months the market is going to be at 2018-19 levels. I think DTIs where about 6.5-8 back then , perhaps wages have move up a touch since then. Still a long way to goto 3.5-5 DTIs, like all markets as it swings back up eventually there will be an overhang of sellors meeting that demand, retirees, people whoose familly are bigger etc. I do not see a bounce like a sharemarket, never ever seen this in property...
Honesty I like it, my friend who is a pain in the you know where, brags all the time to me how much money he has, says, to me his back is so sore from patting it. But its more fun and bragging at same time, I'm his friend and I'm happy for him, hes made money from selling an IT company he grew from a recession, so deserves it. But the thing is like you IT GUY he knows what is hurting and realism. He doesn't brag around other people as he doesn't want to upset them, he has empathy. Its not hard to understand that DTI like 3-5 is best for country as a whole.
Im personally putting my eggs into another basket my supply chain e-commerce business where I can work from home or while on holiday anywhere in the world with wifi, I really enjoy it actually. And its all about stacking products once you create a brand and installed a foundation plus its globally scalable, so great investment for me. Back to property, I hope for the 3-5 DTI but we will see, I make no real predictions as its hard to understand both governments, but hope once things drop sanity will prevail and the FOMO will not come back for a very long time. I do think there needs to be some pain for FOMO to take a rest, so hoping not predicting for more then 30% drop, more like 50%. Property to me is about psychology of buyers with a push from fundamentals like high inflation, and increased mortgage costs. We have had the push and if it lasts, lets see how BBQ conversations stoke the fire of price reductions. If last weekend is anything to go by I think reality is just about to hit with a few mortgage re-fixes happening.
Where I have to give you credit is that you changed your mind. After bagging us DGMs for so long, and appearing to have infinite faith in the property market as an investment, you have pretty much gone 360 degrees. So good on you, some others like HW2 haven’t been able to do that.
I do find that quite ironic though given that you bagged us ‘DGMs’ a lot only a year or so ago…
I think you mean 180 degrees :)
Yes rushed comment
TA positions himself as an average man while speaking, and he keeps the message very simple. The Real Estate industry needs this type of messanger. Cam Baggrie talks about current account deficiets etc and loses many but is a way better forecaster.
I don't mind Tony but I think his view on property is incorrect here and now. He has been right for a long time but he is on the wrong side of a massive correction here, and his pay masters are the vested interests.
The thing about these forecasts, TA and Sharrons at ANZ etc, is that they forecast for about 9-12 months and just revise them as events occur along the timeline. They all have a few models, but like saussages, if you knew what went into them you may not want to consume them. They do not have any more of a crystal ball than anyone else. They may have access to more realtime data, BUT the fact that they call CPI and GDP etc and are often wrong indicates they do not have a special view of the future as they probably only see some of the data.
What is worrying for New Zealand property is that globally we seem to be entering another property correction due to rising interest rates, there is nothing to special about NZ so we will be viewed through a valuation lense and could be punished big time for getting to far ahead in DTI ratios.
IF DTI's are imposed at or near the bottom there will not be a bounce for years as they are then tying property growth to income growth. This will give a huge advantage to those who already hold a large ammount of capital if they are allowed to compete (and they will because property will become a very safe yield asset once DTIs are in).
DTIs are OK, as long as new foreign ownership is banned.
I would oppose DTIs if foreigners were allowed to outbid us for property.
The National Party have historically supported foreign investment.
What is worrying for New Zealand property is that globally we seem to be entering another property correction due to rising interest rates, there is nothing to special about NZ so we will be viewed through a valuation lense and could be punished big time for getting to far ahead in DTI ratios.
Yeah, so are we not possibly looking at a kind of an interest rate doom loop? Given we're "a housing market with a few bits tacked on", as property continues to decline the economy continues down (DTI up) and global investors demand higher yields on Govt debt, then interest rates up - repeat from the beginning???
I’m fascinated that the FMA don’t have a fascination with Tony the comb.
Maybe it will take a buyer who took his advice/vested opinion and is now wallowing in unserviceable debt repayments to make a formal complaint for them to wake up.
Weren't you saying that a while ago HouseMouse? Maybe Tony has been reading your posts, but missed the flip flop one.
A significant number of sales in Auckland were for full sections that had development potential. When I was "analyzing" sales in the last half of 2021 I noticed the biggest differences in a QV valuation now and the sale price in 2021 were for properties that were 650sqm+. Some differences were half a million dollars!
Time will tell if these continue to be hot properties. It must depend upon Auckland's population growing through immigration surely.
Will depend on the suburb Zach, if it's got views or premium suburb they will be resold for single large exec homes. I think these prices will fall, perhaps by the most as developers now not that interested and the land bank and rebuild crowd is smart and will want to see serious discounts to grab a bargain, they often have to sell an existing home to fund things...
in the cheaper suburbs only multi units will ever be built now. So these prices are to be determined by DTI levels, credit, int rates building costs etc. IMHO they will be built on eventually but it maybe some time, most developement is funded by banks and 2nd tier lenders and they not that interested in this space at the moment.
We got silly money for a dev site in Glendowie Nov 21, Rank group where eventually outbidden by a chineese developer. I suspect that Rank may well eventually buy it off the developer, the haircut will be huge. You are dead right, dev sites were selling for around $4,000 per sq m, we purchased a rural lifestype property at the same time, the cost was $20 a sq m. The developers are now sitting on huge paper loses, the question is how long they can fund them before they become negitive equity holders.
'So far'
The pendulum has swung. Buyers will evaporate, too scared to buy in a declining market. The decline will accelerate.
It is merely a flesh wound. Times will be tough but things will get better. People just need to hang in there.
Who will be correct? Let's compare outcomes in three years.
Buggd if I know..so much could happen.
But over 3 more years we have a lot more boomers selling up and the world is competing for the young bright ones. The few we have are below replacement levels ...and leaving.
Things will need to turn around big time for NZ... but another 3 years of Jacinta?
Not worried here, mortgage free and saving at least $30K in rent a year. House still worth more than I paid for it and the current valuation is a bit of a joke if you look at the actual cost to build is now on land getting further and further away from the CBD.
"The average value of New Zealand homes is down more than $100,000 so far this year, and almost $200,000 in Auckland and Wellington."
Those that listened to the Vested Interest Brigade and bought recently will be losing their Faith in the MSM.
MSM - acronym for?
Main Stream Media. Clearly I'm just one intellectually disabled person helping out another.
Onlooker is not intellectually disabled.
Main Stream Media
Still houses in New Zealand are highly over priced. What happens when 15% of the population which is in 70+ range is ready to move to retirement villas and their 4 bed houses are available for next generation to buy. It is coming soon. The glut of properties to be sold. Just hold on to that cash if you have. You might buy two for the price of one.
Imagine the glut of retirement homes/villages when the boomers die off. Maybe they can be used for housing the younger generations. The supply and demand is going in the opposite direction for the property investor.
$100K and $200K is quite a bit of wealth effect. Don't be surprised if consumer spending is not as bubbly as Robbo and media might say.
This is just for the calendar year. Does anyone have the stats on how much Wellington has fallen since the peak?
This is just for the calendar year. Does anyone have the stats on how much Wellington has fallen since the peak?
Likely a value equivalent to what the property owners can save from their incomes for 4-5 years.
A commenter here had a nice table for each region recently, miguel? Maybe?
Here is the QV link that drills down the regions further and shows the peaks. https://www.qv.co.nz/price-index/
This is just the beginning of the unwinding of the Ponzi.
Yes but you have to take account of the fact that house prices are falling while CPI is still very high. On a real (inflation adjusted) basis house prices are getting crushed.
I'd be very happy to invest in property again but I'd need to see inflation return to target first.
Consider how much of a u-turn needed for the real house price to be going up again...
QV figures show average dwelling values in Auckland & Wellington down almost $200k so far this
Hose value in Auckland went up on average by $500000 to $600000 so drop of $200000 seems to be drop in the ocean of price rise.
Still up $300000 to $400000 on average in Auckland, so is bonanaza for many except those few who bought at peak but even they if are genuine FHB and have borrowed within limits (seems unlikely) / able to service the mortage may feel disapointed but will come out positive over long term.
This suppor /limited fall till now is as ie being supported by FHB, as are many who have felt so left out that are still under FOMO and still borrowing in extreme to buy. Once that phase is over, it could be free fall.
Can imagine the extend - FOMO emotion was in extreme - buy now or will never and was not without reason as head of Bank Mr Orr and more important head of the Country - Jacinda Arden by their words and action had made it clear, come what may will not allow house price to fall and they truly went out all out support the ponzi.
Can imagine the extend - FOMO emotion was in extreme - buy now or will never and was not without reason as head of Bank Mr Orr and more important head of the Country - Jacinda Arden by their words and action had made it clear, come what may will not allow house price to fall and they truly went out all out support the ponzi.
Cindy said along the lines of "people don't want their house prices to fall". She never actually promised that she would ensure that they don't. But she said this and promised "affordable house prices." The sheeple bought it. Hook, line, and sinker. The ol' NZ Never-never Land.
We're only a year into the fall, plenty more time for that bonanza to be evaporated.
Auctions in Auckland should be interesting this week. Already seeing a few sold for realistic prices. The odd one selling for less than they were purchased for a couple of years ago. Of course it may not matter too much if the vendor is purchasing another property at a discount.
I used to go to the auctions for amusement but so much easier with everything being live online now.
Next leg of fall should be steep and fast, when it starts
I think so too as vendors realise that now is the time to take that halfway decent offer if they are lucky enough to get one.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.