Average New Zealand dwelling values increased 2% over the three months to January, according to the Quotable Value House Price Index (HPI).
The average value of NZ homes was $925,461 at the end of January, up 2% compared to the end of October 2023, but down 1% compared to the end of January last year.
Around the country, Queenstown-Lakes District had the highest average value at $1,807,282 and also the biggest quarterly increase at 4.4%, according to the HPI. Invercargill had the lowest average price $466,898 and was also the only major district to have a negative quarterly value decline at -0.6% (see the table below for the full district figures).
QV Operations Manager James Wilson said housing data continued to be volatile in some areas of the country where a relatively low number of sales had been occurring.
"It doesn't take much change in activity to increase or decrease the value performance of some of our less populous regions, but the overall trend is the housing market is slowly but surely strengthening," Wilson said.
The comment stream on this article 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.
94 Comments
Awesome, annualized 8% inflation, that's what we all want and deserve.
"relatively low number of sales"
Relative wanting to sell in Matamata. 5 open homes, 1 viewer.
Is that an area where you live if you can't afford Cambridge or Tauranga.
Maybe suggest dropping the price by 10-15%.
Can't afford Tga? Lots of ex farmers retired to Tga . Decided that was a huge mistake and shifted back over the hill. Matamata isn't my idea of a good place but most amenities are there and within easy walking distance.
Lowering the price is probably a waste of time ATM if almost no one is looking.
No beach so if all you like is green fields and that small town feeling then Matamata is fine.
Welcome to Matamata: Atleast we're not Morrinsville
I have property up for sale in Rotorua low turnout at first two open home but I ain’t having a fire sale. It can sit on market until sensible offers come in.
"I have property up for sale in Rotorua low turnout at first two open home but I ain’t having a fire sale. It can sit on market until sensible offers come in. "
There could be more selling competition coming soon.
Repeat: the housing market doesn’t consist of whether price is rising or falling.
Sales are flat and way below 5 and 10 year averages despite stock of housing being up
Unaffordable to large proportion of pop without losing 40-50% of disposable income on mortgage
You can say just as well that increased money creates deflation. How does this work? If most bank credit is created to increase the price of housing, to lend against houses and raise the price of housing, that is going to increase the amount of money that people have to pay for housing.
From 1945 to 1980, 25% of American income was what you would pay for a mortgage or for rent. Today it’s up to 43%, guaranteed by the government and even higher for many people. If you have to raise the amount of your income from 25% to 43% to pay the banks for mortgage credit, you’re going to have to cut back your spending on goods and services accordingly.
In the 1930s, this was called debt deflation. Everybody knew what it was. Irving Fisher wrote a great article on debt deflation. My book, Killing the Host, describes debt deflation. The banks try to say, no, no, money inflates the economy and our credit helps employ labor and raise wages, but when we create too much, meaning when wages go up, then we have to step it back down. The worst thing that can happen to an economy for a banker is for wages to go up. The banker wants wages to go down, so the banker wants all the money to be paid as interest in the economy.
Somehow they can turn everything upside down. What you get in the press and the politician speeches is an inside-out economics, not realizing that bank credit deflates the economy, causes unemployment, and that’s how the Federal Reserve manages the banks to make sure that wages don’t grow, that housing prices grow, that rents grow, that money paid to the banks grows, but not money paid to labor or to industry. Because if you had industrialization, if America was still a manufacturing economy, there would be higher employment for labor, and that’s not what the class war is all about in a financialized economy.
Great link - so when does this get underway, I wonder? And what might make it happen?
The only way that you can re-industrialize the economy is to prevent all of this unearned income, this free lunch income, the land rent, the interest charges, the monopoly rent. You want to prevent that from being subsidized by the politicians that are put in place by bank contributions so that all of this rent can be paid to the banks.
If there is unearned income, obviously some houses and some locations are going to be better. You want this to be the tax base. If it’s the tax base, it’s not going to be capitalized into higher prices.
RADHIKA DESAI: You mean a land tax?
MICHAEL HUDSON: Yes, a land tax primarily.
Land taxes mean higher property prices. Pretty simple really. Remember when the last socialist government decided to make being a landlord a little less appealing?
Did rents go down? No...they went up.
"Remember when the last socialist government decided to make being a landlord a little less appealing"
That was an unintended consequence (& cost) of the previous government's objective of levelling the playing field for all buyers of existing residential real estate.
Landlords could always continue their tax advantages in specific residential real estate ownership markets
1) new builds
2) social housing
Land taxes mean higher property prices
Not if your 'property price' includes a land component. Land tax is a rare example of a tax that lowers the purchase price.
Two identical sections A and B. Section A has an annual land tax of 1% of land value payable, section B has no land tax.
Would you pay more for section A or section B?
Yes since about 1976 wages as a % of economic production has dropped around 10%. Replaced with debt
IMHO there simply is not the wealth to buy the houses that the elders want to sell. Markets dynamics and downsizing are going to make the next five years very interesting.
Not just housing either. What will happen to sharemarkets when that bulge of aging population goes from net buyers of shares via their pension schemes, to net sellers of shares to fund their retirement. It's not the money you put into kiwisaver that counts, it's the money you get out.
Beanie - haven’t we got to that point already? Most boomers are already well into retirement, and the last straggler boomers are well over 60.
No, not yet. In NZ the peak ratio of retired to workers is still a couple of decades away. That is what the NZ Super Fund was set up for. Worldwide I am not sure when it peaks.
But that is when the ratio is highest, the majority of boomers will have reached the age that they can drawdown their Kiwisaver/retirement accounts (age 65) long before then.
we will simply see more immigration to increase workers who will be joining kiwi saver, working force i believe increased by 3 percent last alone.
Yes, this is an issue world wide. This is going to be very interesting as it rolls out. Sure there will be a % of asset inheritance, but those assets will likely need/want to be liquidated too, adding to the overall pool of over valued assets relative to the buying power of the customer (gen x,y,x).
Most kids of parents with house already have their own house and have debt, they need to sell the place to payback their own debt. Tax and income wise its not worth renting out with yeild's at 3-4% and your own mortgage at 7%.
I saw a do up on 700 sqm sell just over 1 mill on Saturday. It was a gd buy if you semi traddie and redo yourself, or just wait and bowl and build 3 on the site.
Not a strategy i would follow at this point but multiple bidders where active. Low end AKL property is selling its the 1.7-2.6mil type range thats pretty dead in terms of sales. This IMHO is why you are seeing so many Auckland Central selling below CV. The market has moved a long way, especially for rundown big sites close to city (developers not active vs bidding hard in late 2021).
In the case of the developer who bought my house, they have moved in themselves and are waiting it out, rather than take the $1mil hit to get out.
They did tidy it up inside and outside before moving in, probably upgraded the show curtains....
Ian Wishart used to say that around 25 years ago, and was pretty forthright. I wonder where Ian is now, probably lynched by the would-be buyers who took his rubbish advice
Well, perhaps not at the prices the elders would like to sell them at. But since aging cannot be stopped they may have to sell at a price that reflects the wealth available. I agree, coming years will be interesting
Markets dynamics and downsizing are going to make the next five years very interesting. [HughJorgan; above]
When was the next five years in the housing market NOT going to be interesting?
TTP
IMHO there simply is not the wealth to buy the houses that the elders want to sell.
You mean to say not enough wealth to afford to pay the house prices that the elders want or expect.
Any sellers of equities will be done as it is now, when it is needed. Most pension schemes are in funds which are bought and sold all the time and you can see their value at any time.
There are funds coming in from savers all the time hence its perpetual nature.
There are changes coming up relating how much can be borrowed against property which should have an impact along with a higher OCR and mortgage rate offers.
I believe also that the OCR will increase this round, simply because inflation is now the only driver for the RB. The remit was changed under urgency last year, so before they had to consider employment, that is no longer a consideration.
They also have to consider financial stability. IMHO they will not put OCR up 50bps, maybe 25... they have now scared a lot of people into closing their wallets. Many do not ned to be scared they have no money in their wallets.
As in all recessions some seem to be sailing through on multiple high incomes, while others struggle.
I have noticed a lot of things on trademe getting no bids at resonable prices, and $1 res is no longer a great way to sell as often the bidding stops way lower then you could have achieved with a fixed price.
Also noticing smaller retailing move 100% online and out of garage at home.
I agree, they have also financial stability in their remit, and putting the OCR up to 6% might have significant implications in this area.
I actually do not believe that they will raise at all - yes they will come up with some kind of hawkish statement, but that will be it.
I think that they will keep the OCR on hold until the second half of the year, when they are actually going to cut once or twice, by 25 pbs each, towards the end of the year.
With current sticky inflation on one side, and relatively high interest rates on the other, it is now a very fine, delicate balancing act, and the RBNZ will be extra careful both ways.
https://www.newstalkzb.co.nz/on-demand/week-on-demand/
The Hosk is not happy, listen on demand @ around 5:27am, RB will be carrying out a "social crime" by introducing DTI's, housing is "what we do in this country..."
I guess this will be his "crusade" this year,get the property market back on track,get the sheeple believing the RB is shafting them by not letting them borrow vast sums to feed the ponzi beast.
The RBNZ knows dam well that prices cannot be sustained at these high levels, they do not want things to get worse.
We need to focus on being able to build for less money ... lets think
Removing GST on New Builds for FHBers
Standard lower cost designs with pre approved designs
Working with councils to remove questionable developement fees.
Promoting owners rights to subdivide.
I think that the hugely expensive price to build is a major part of the problem in the housing market. Opting out of the market and building is a pressure valve release for the market, usually a good number of buyers opt out of the real estate market and build their own house often after months of not finding what they want at a reasonable price. Very few are doing it now.
At the other end, banks seem to be not applying normal rules to defaulting loans, we are seeing very few forced sales dispute anecdotes of significant stress. The whole thing feels like more and more pressure is building in the market, as indicated by the very large numbers of housing stock for sale, but the normal outlet valves of forced sales and buyers opting out to build new no longer happening.
Hosking himself is a social crime.
Great ad hominem conversation right here. You call it banter?
Hahahaha the Hosks early morning show is literally sponsored by One Woof 😂😂😂
See above
You say 'ad hominem'....others might say 'conflict of interest' when it comes to ZBoomer and property news...
Saying a show is sponsored by a housing related company is in no way an “ad hominem” attack.
Saying Mike Hosking is a f**tard is an ad hominem attack and also 100% true, what to do?
His early edition show is literally sponsored by One Roof.....Are you a bit high Flying High?
Housing is "what we do in this country"
Can anyone say that without breaking into tears at our lack of ambition? At least mention that we milk a few cows while waiting for the capital gains.
So much Entitlement Mentality to free money from housing where we should have ambition and enterprise. What a disappointing lot of folk, bludging off productive society.
Hosk is a housing investor. Likely has used debt to rinse his not insignificant tax bill in the past. #compromised
How do you "rinse" your tax bill through PI Averageman ?
By turning taxable income into untaxable capital gains.
Sounds great! Can you tell me how to do that please? Like precisely? Thanks.
Ppty always goes up. . Just buy any old s##box and stuff it full of migrant workers or tax payer funded deserveees
.....apparently.
That's beside the point, Baptist said he can turn "taxable income into untaxable capital gains", and many up thumbed him. I'd love to learn how to do this magic trick ?
So no proper replies, just preconcieved BS with no substance. But hey, lots of upvotes, sooo... all good. LOL
Up until the ringfencing change it was fairly easy to arrange your affairs to have excess property debt offset a reasonable chunk of your income tax. Then as mentioned there is the tax free gains. But I'm sure you knew that.
Im guessing Yvil has significant incomes and pays a high tax rate
Slow and steady winning the race. We'll all feel like this year's sustainable 10% value increase is just what's needed for national confidence and also stability in the many housing adjacent industries.
since when QV start to call their valuation HPI? thought that's REINZ.
HPI means House Price Index. It is simply an analytical calculation based on a variety of factors rather than simply the selling price (such as mean and median prices) and any entity can develop their own HPI. The use of a HPI is not exclusive to REINZ .
The RBNZ uses a HPI as its measure of house prices which in their case is calculated by CoreLogic . . . and it is not the REINZ HPI.
This may be anecdotal but I've noticed a huge increase in apartments for sale in Wellington in the last month.
May be due to the new 'austerity' measures proposed for the Public Sector, and the reduction in Contractors/Consultants.
Anyone else noticed this?
Don't follow Wellington apartments but is Wellington not a special case where apartment blocks don't meet earthquake standards so people will try to offload?
Yep.
Half considered buying an apartment when I moved to Wellington a few years ago. A large chunk of them had body corporate fees to the tune of $20k a year, which seemed to reflect a need for strengthening to be bought up to standards regarding earthquakes.
If you'd like to pay that on top of a $450k mortgage for what was on offer, you need to get your head checked.
Greg, can you please ask that they update the Median Multiple data?
This is important as absolute price rises are not as important without comparing to the relative rate they are against income, ie as one measure of affordability.
Thanks
Dale, I've passed your message on to the appropriate updating authorities. Cheers
Thanks
What if the 1800 odd houses in that flood prone area that were consented in Akl were not built? Slightly off topic. Doing some research for other reasons came across this. Building Act 2004.
71 Building on land subject to natural hazards (1) A building consent authority must refuse to grant a building consent for construction of a building, or major alterations to a building, if (a) the land on which the building work is to be carried out is subject or is likely to be subject to 1 or more natural hazards; or (b) the building work is likely to accelerate, worsen, or result in a natural hazard on that land or any other property. (2) Subsection (1) does not apply if the building consent authority is satisfied that adequate provision has been or will be made to— (a) protect the land, building work, or other property referred to in that sub‐ section from the natural hazard or hazards; or (b) restore any damage to that land or other property as a result of the build‐ ing work. (3) In this section and sections 72 to 74, natural hazard means any of the follow‐ ing: (a) erosion (including coastal erosion, bank erosion, and sheet erosion): (b) falling debris (including soil, rock, snow, and ice): (c) subsidence:
Not quite sure how Mayor Wayne Brown said they couldn't stop the consenting.
My understanding is that local and regional council get to deny land use at the time of subdivision. Once the section is approved and titles issued you are able to build, as long as you comply with District Plan. It is the resource consent and subsequent conditions that might make reference to minimum floor levels or identified building platforms. These areas may have been consented a long time prior to the latest flood modelling.
In our area huge new flood areas have just been identified, not based on historical flooding as used to be the case with council, but based on modelling from NIWA projections. As well as this new LiDAR data has identified large numbers of active faults, with associated fault avoidance zones (no build zones).
These Auckland sections are a problem, surely if it’s not just a matter of increasing minimum floor levels then they should not be built on. But who pays the price for that?
If this is the case its a right royal mess. It seems to me the RMA or whatever was in existence at the time allowed subdivision followed by a BC, built, then followed by subsequent flooding ,a BC can still be obtained for a new dwelling without mitigation by raising floor levels. The 1800 odd houses had BC after the floods? Maybe I've missed something.
The above clause still allows the council to refuse a BC.
The situation then arises the original subdivision is still valid, you own the land, but now can't build on it.
Maybe Kate could have some input here. She seems fairly knowledgeable on this type of situation.
I guess you have to do your due diligence, which by the way is not easy. Bought my current place and even the place I used to do the house transfer, the legal team never picked up it was in a slip prone zone. Only found out when a letter arrived a few years later from the council to inform me it is no longer in a slip prone classified zone. I guess there are plenty of places built out there with fingers crossed, wait 10 years and nothing happens so its all good.
Due diligence is vital. Planning maps need to checked before buying any property to assess known hazards listed in the district plan.
In the case of consented subdivision that has not been built on and new hazards being identified it’s important that some solution is found to stop the building happening…surely these houses would quickly become uninsurable. It may be that district plan rules need to be changed to change the status of this land but that would require a significant process including public notification… maybe what’s needed is a change in legislation… current owners would surely need to be compensated. We are going to get close to wiping out large areas that could possibly flood based on NIWA modeling.
The builders have just departed from my new Tasman District home (second dwelling on existing site). Cost double what two different builders supplied. Little wonder building consents crashing. Existing homes will need to increase to approximately same as new builds before things get moving. The market has always played catch up. New build costs always set prices.
Yes, when you consider what it costs to build i cannot fathom how some people think existing houses are going to fall considerably further. The only way that is going to happen is with NZ adopting prefab manufacturing in a big way or a major shake up in consent costs. It will take something major.
The "unaffordability" of houses that many people conjecture does not neccesarily mean dropping house prices, it means mass homelessness.
"major shake up in consent costs"
For a new build, say a second dwelling on an existing section. I understand Akl only tell you after you have submitted the dwgs what the consent costs will be. For common or garden new residential house in NP there is a fee structure based on the value of the build so you know the BC costs in advance. There may be additional inspection costs over "standard" inspections built into the fee but these are very unlikely to be an additional major expense. The only time I see a problem if the council building inspectors are standing around and picking their nose in the office and their manager needs to make budget so insists on additional inspections.
There are just no buyers in the market and house prices are still easing - the REINZ data is out tomorrow. Early indicators from them ( primarily stock inventory) and other Auckland data ( most notably the Barfoot and Thompson monthly report) suggest we are about to see more drop in the HPI. No one will want to build a house that is worth significantly less than the build cost when they take possession. The housing market will have to stabilise and building costs will have to reduce as happened after the GFC to get building happening again.
..by an inability to pay the land prices asked. Land price drops. That's one way.
Secondly..an increase in supply. Not from new builds but from distressed sellers and boomers and landlords getting out.
10 buyers for 5 houses is one thing. 5 buyers for 10 houses and it all changes.
Property investors always seem to forget that property prices could go down to make things more affordable. They forget that yield is based on rent and property value, and that new builds are based on the cost of building and the cost of land.
"Secondly..an increase in supply. Not from new builds but from distressed sellers and boomers and landlords getting out.
10 buyers for 5 houses is one thing. 5 buyers for 10 houses and it all changes."
The owner occupied house of a property trader has been listed for sale at a fixed price for over 12 months.
So one house listed for sale with zero buyers.
If that seller was under time pressure or cashflow pressure, the way to achieve a sale would be to drop their price and accept a lower price offer which may be the only offer that they get (in real estate agent's jargon, "vendor meeting the market")
As long as banks continue the extend and pretend reality is avoided. The standoff continue.
Will be interesting to monitor residential real estate markets in the next 12 - 18 months.
Potential for increase in supply to the market starting in May, June triggered by one change affecting many non owner occupier owners.
There are some indicators starting to show in some market segments in some geographical markets if people know where to look.
It’s the land component that’s the variable factor.
the land will crash and building costs may plateau.
$750k for a section in drury?anyone?
"the land will crash and building costs may plateau."
There is a commonly held belief that land prices do not fall.
Previously in Queenstown in 2008, saw sections that had been offered and listed for sale at 475,000 that subsequently were offered at 175,000.
How much are these same sections worth now? $1 million? More?
"when you consider what it costs to build"
Costs of construction relative to the market selling price matters to builders / developers / product manufacturer / seller to assess the product's margin and profitability. Costs of construction are of little relevance / consideration to most buyers.
Similar in other industries. If you’re a purchaser of any product or service (e.g apparel, mobile phone, motor vehicle, auto repair, hairdressing, etc) how often do you think about what is the cost to manufacture or the retailer's cost when you buy?
Something seriously wrong here. I can understand an increase up to 20% max. Double. I could name 1/2doz things that would lead to that and nearly all involve what's in the contract.
At current interest rates people can't afford an existing or a brand new property. Something has to give somewhere.
"At current interest rates people can't afford an existing or a brand new property. Something has to give somewhere."
Many highly leveraged borrowers are hoping that the variable that moves the most is interest rates. There is a lot of "hopeium" by leveraged owners, and also being promoted by property promoters with the vested financial self interests.
Auckland, Paris, London... they're all the same
More population, not enough houses, prices will continue to rise
It’s good to have another resident spruiker.
Welcome John!
We'll soon be the majority here
"More population, not enough houses, prices will continue to rise "
Many property buyers and the general public believe the above narrative. There is a genuine common misunderstanding of the linkage between house prices and the two types of demand.
This common misunderstanding is commonly repeated by property promoters with their vested financial self interests.
New York, Zurich, Palmerston North…even more so🤪
Always hilarious when people try to shoehorn Auckland into a great cities list. Doesn’t even make the list of top 5 Australasian cities.
Paris and London the same as Auckland? You obviously never lived there, those European capitals have a lot more to offer.
Interesting the Queenstown Lakes has performed so well. Right now there are the most listings over the last three years in Wanaka where I live. In August 2021 it got down to 100 and now it's at 311. There has been a noticeable increase this year so far.
During the pandemic people flocked to Byron Bay in from the cities but now prices are 25% off their peak. I wonder whether that is still to happen here. I know of quite a few people who have left or are leaving because of the cost of living.
Honestly…I think Queenstown and Wanaka are going to just keep cranking.
As long as Aussie and cashed up Jaffa's are buying you may be right. Any massive downturn in the Aussie and Auckland property ponzi could see this swing wildly. See what happens...
Where's the plunge in property prices predicted by the interest.co.nz commenters over the last few months?
Where's the increase in prices touted by the other interest.co.nz commenters with the change of government?
Read the article, all areas have increased bar one. Anyone who bought a few months prior to the election is at risk of making some very serious money. Particularly near growth areas like Queenstown or Coatesville.
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.