QV says housing market largely flat overall

Property / news

QV says housing market likely to stay flat or gently rising 'for the foreseeable future'

10th Oct 23, 5:00am by Greg Ninness

Average house values remained "largely flat" in the September quarter, according to property data company Quotable Value.

The average value of New Zealand homes was $899,256 in the September quarter, up just 0.9% compared to the June quarter according to QV's House Price Index.

Around the main urban areas nine districts posted quarterly increases in average dwelling values while five districts posted declines. One, Nelson City, was unchanged.

The quarterly increases in values ranged from +0.1% in Napier to +3.2% in Invercargill, while the quarterly decreases ranged from -0.3% in Rotorua to -1.8% in Whangarei and Nelson (see the table below for the full regional figures).

"You can best describe the market as flat right now, but we certainly are starting to see signs of life once more," Quotable Value operations manager James Wilson said.

"If the weather allows it, we are likely to see an uptick in residential property listings after the election.

"Until then, there is still lots of uncertainty out there and markets don't tend to respond too well to uncertainty, especially while such strong headwinds continue to blow.

"For that reason alone, I expect the market will stay flat to gently rising for the foreseeable future," Wilson said.

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81 Comments

by Thats All Folks | 10th Oct 23, 6:52am 1696873956

Gently rising to the edge of the next cliff.

Anything for some shameless subliminal spruiking 😂

by RickStrauss | 10th Oct 23, 10:29am 1696886992

Another $774 million of welfare handouts for Auckland property announced today. Glad working Kiwis can help prop things up yet again.

by Nzdan | 10th Oct 23, 10:42am 1696887756

If there's some good news is that it'll be levied in rates against Auckland residents, and not the taxpayer.

“On the other hand, we are asking all Auckland ratepayers to pay higher rates to make this happen. They will be paying off the debt associated with this decision for decades. I feel the weight of that responsibility.”

by RickStrauss | 10th Oct 23, 11:36am 1696890997

Auckland councillors have today unanimously voted to accept the proposed $2 billion cost-sharing buyout package for hundreds of uninhabitable properties and other storm-related costs with the Government (taxpayer).

by Nzdan | 10th Oct 23, 11:50am 1696891825

Yes. The buyout package for the homes falls on the rate payers. Other storm-related costs, I assume things like horizontal infrastructure/roading etc end up with the taxpayer.

by RickStrauss | 10th Oct 23, 11:58am 1696892289

Ah, thanks.

by Crazy Horse | 10th Oct 23, 10:54am 1696888476

Yep RS .....when will the PI's stop being so naive and realise the handouts they are getting from the TAXPAYER are propping up what's left of this stupidly overpriced market (only speaking for Auckland, as that is the only market I know in NZ)

Let the MARKET decide the rents ....take the accommodation supplement away and THEN the "real" economy can decide what your property is worth for rent, in relation to average incomes.

That is a TRUE free market .....and as a very recent PI in the USA, you end up with a much better return pa ...12% and 15%

NZ should stop living beyond it's means ......in the near term, it will never catch up with Aussie - they have the stuff in the ground :)

While as I have said for nearly a decade, all these taxpayer funds that are dished out to PI's, could be used for innovations, new industries and R & D etc

At the moment the property sector is like a machine, sucking the life blood out of the economy, of a country that hasn't got the inclination or gumption to even process the raw logs it exports out of Gizzy !

by RickStrauss | 10th Oct 23, 2:34pm 1696901671

This fresh welfare handout to property coming after the COVID-era $12 billion RBNZ handouts to property too.

by Flying high | 10th Oct 23, 10:36am 1696887365

Why did the farmer drive over the cliff?

Because he/she didn't see the ewe-turn

by Dgm | 10th Oct 23, 7:06am 1696874796

It's on the way down folks... the initial pick was due to spruikers passing false narratives about falling interest rates...

Cost to borrow is the fundamental basis for the direction of house prices..

by Iceman | 10th Oct 23, 9:17am 1696882635

And the cost to borrow has almost reached it peak, but you’re always out in force every time there is a housing market related headline stating your ultra pessimistic/wishful views. I think you’re a bit concerned because the writing is on the wall for you. Not many more rate hikes ahead but keep preaching your nonsense. I reckon you just crave the attention/gratification from your fellow DGMs on here.

PS - instead of just being a keyboard warrior and reacting to daily headlines from the comfort of your armchair, I suggest you read Williamontes comment below for proof of what’s happening today in the real world.

by Colin Cameron | 10th Oct 23, 10:53am 1696888400

Iceman bang on I am waiting for that 10 percent guarantee that was promoted on here for so long yet seems to have fallen off the cliff mean while things are still ticking along

by Dgm | 10th Oct 23, 1:09pm 1696896595

If you lack the ability to understand the basics of Financials, your parents should have done better

by Colin Cameron | 10th Oct 23, 1:22pm 1696897337

My understanding of the basic Financials is doing fine. I just don't promise or make guarantees that I can't back up

by agnostium | 10th Oct 23, 1:45pm 1696898704

Nice on orphans

by Averageman | 10th Oct 23, 11:19am 1696889963

But but the spring surge...surely the vested interests were not just spouting PROPaganda...

by kpnuts | 10th Oct 23, 7:37am 1696876676

its life Jim but not as we know it -- are these the same green shoots and signs that tony A and the RE's have been talking about for the last 18 months .....

by willamonte | 10th Oct 23, 7:48am 1696877312

4 negative comments yet I have to ask, have any of the 4 of you been out trying to buy a house? Prices went up June, July and August and asking prices are up as well. My daughter was in the market and so were we and it was competitive. While I agree the cost of borrowing is a factor it does not seem to be stopping people, they think this is likely close enough to the top of the interest rate cycle, rightly or not.

by Chaosinflesh | 10th Oct 23, 8:04am 1696878254

Asking prices are not sale prices. Though I agree, the narrative given is not so gloomy (for people hoping to sell).

I find in interesting that a number of 'for sale' signs have magically sprung up on my street this last weekend - to add to those that have been for sale over winter. Only 1 house sold in that time, it was a dive, and sold within two weeks - so I presume it's asking price was right.

For the time being, people's available deposits are increasing, so you would expect sale prices to increase slightly as we see sales numbers drop as those with higher incomes buy - and we slowly exhaust the available supply of higher-earning buyers. There will be buyers all the way down.

by Black and White | 10th Oct 23, 8:31am 1696879916

Flat to falling very fast.

by willamonte | 10th Oct 23, 9:43am 1696884216

Nup no way, I saw the sale prices through winter, I just wasn't arrogant enough to comment on todays prices just what I see being asked TODAY. ASKING PRICES.

by Retired-Poppy | 10th Oct 23, 9:48am 1696884529

S O L D!

by Yvil | 10th Oct 23, 8:33am 1696879996

Don't bother with these commenters Willamonte, it's an absolute waste of your time.

by Retired-Poppy | 10th Oct 23, 9:17am 1696882649

Willamonte, don't bother with Yvil. Tomorrow, he will harass you for missing a "tick".

by Flying high | 10th Oct 23, 10:38am 1696887500

Lols

by tothepoint | 10th Oct 23, 1:55pm 1696899307

Hi Yvil,

Forget Retired-Poppy….. Why would we waste time with someone who couldn’t pass an IQ test - or a breathalyser?

TTP

by Retired-Poppy | 10th Oct 23, 1:47pm 1696898823

TTP, (Tim) were you really involved in price fixing as per below? That's really dishonest! Shame on you.....

by starrider | 11th Oct 23, 9:34am 1696970063

Commerce Commission - Property Brokers Limited and its sole Director Timothy John Mordaunt (comcom.govt.nz)

A bit rich coming from a fraudster? Organizing a price-fixing ring, involving at least 10 other real estate firms.

Property Brokers Limited was ordered to pay $1.45m, and its sole Director Timothy John Mordaunt (TTP) was ordered to pay $50,000, following admissions that they had breached s 27(1) and (2) via s 30 of the Commerce Act by entering into and giving effect to an agreement with at least 10 other real estate agencies in Manawatu to pass on to vendors the cost of advertising a property on Trade Me.

by Yvil | 10th Oct 23, 11:22pm 1696933374

I didn't know RP commented as I no longer see his comments because I have hidden them with the great app from one of the other readers.

by Dgm | 10th Oct 23, 9:33am 1696883582

This coming from someone who adds absolutely nothing to this site.. narcissistic attitude as usual

by Nzdan | 10th Oct 23, 10:48am 1696888115

I think Yvil adds value to this site. You don't have to agree with everything he says, and I'm sure Yvil doesn't mind being on the receiving end of banter. I've flung some banter/trolling his way for shits and giggles and then we move on.

Don't take it personally, it's just a financial news website with a dynamic mix of commentators.

by Dgm | 10th Oct 23, 11:52am 1696891924

Wake up and have a look at who had the first dig... did he buy you donuts...

by Nzdan | 10th Oct 23, 1:44pm 1696898689

I haven't seen any donuts. @Yvil, where are they at?

by JimboJones | 10th Oct 23, 11:58am 1696892338

I find Yvil to be one of the most neutral commentators, telling it how he sees it instead of pushing the same agenda over and over.

by Yvil | 10th Oct 23, 11:19pm 1696933189

Thanks JJ, that's much appreciated!

by Yvil | 10th Oct 23, 11:20pm 1696933249

I think Yvil adds value to this site

Thanks a lot NZDan

by Nellbell | 10th Oct 23, 8:33am 1696879998

I am actively looking to buy, not in Auckland, have been looking for some time - over 12 months. Up until now only the lowest value homes selling I suspect to first home buyers, and I suspect they are being sold by investors who bought during the recent boom. Now though there are shifts happening with “vendor motivated” being declared and list prices being reduced with better quality homes. Sales volumes are still very low and usually 3 bed 1 bath first homes. Auckland May be experiencing its own thing, but the markets are shifting at different times around the country. Cost and availability of mortgages is really dictating sale rates here.

by swapacrate | 10th Oct 23, 5:22pm 1696911744

We have been looking last 6 months. Its a bit of a crack up. You can see people bought homes for $600K ish probably at their lending limit on 3% now asking for $800K to $ 1mill ish. Now with rates on 7% give or take, we have a lower limit and banks stress testing over 8, we don't have the capacity to borrow what people are asking for.

So in our area its a stale mate, no one is buying and the listing numbers are lower. We are within an hour distance from Auckland. Some houses have been on months, and are getting reduced. Then some houses have been taken off and then added back on after a couple of months, to make house look like a new listing. We just need new listings and people to start to panic. Which could happen with increased competition.

A lot of the houses can only be sold to people who have already sold at an inflated price. So not much is selling in our area.

by Kate | 10th Oct 23, 7:22pm 1696918971

Yep, you got it. The RE version of a Mexican standoff. Sellers look at what other properties are asking - so ask more than they paid (no matter what the market is saying) with the hope of replacing like for like, or at worst taking only a minor hit on amenity (if they want to sell down).

Buyers are only paying what the market (recent sales) are telling them (and the banks are allowing, of course). And recent sales are few and far between.

I've never seen such a high proportion of 4 bedroom+ homes on the market. Keep wondering how many of these are elder downsizers - they are in the best position to be negotiable downwards on price - but then they'd probably like to put some cash on deposit for retirement!

by AshwinRai1488 | 10th Oct 23, 8:33am 1696880032

On the ground perspective quite helpful even if it is anecdotal. Perhaps the good houses are still few and far between and that is where the competition is.

It is worth remembering that back in 2000s Greenspan had raised interest rates and held them high for almost 2 years. During these two years US property market was cooling off and was expected to do so for some time. Of course what happened eventually was a crash.

I think only after inflation has been tamed and in the rearview mirror can one be sure that the housing market has bottomed. Until that time there are still downside risks.

by Spiceeh | 10th Oct 23, 1:09pm 1696896553

Here's one. Bought a block in a recent regional subdivision. Last block to sell(apparently the couple who had secured it previously(nothing on record though), bailed on it). Anyway the developer has been hiding their blocks with an exclusive agent to get higher prices. They released this block and two others in another of their local subdivisions, all at once to get rid of them. Prices of the blocks already sold were 40-80k higher than we paid over 2021-22. They reduced the price of our block to what they thought might sell(I thought it might too) and nothing. We offered 20k less than that and SOLD. We paid 81k less than the highest price paid in the subdivision with most blocks being the same size. We got the corner block, so if rules change and our plans change, future growth might mean the possibility to subdivide.

by rastus1 | 10th Oct 23, 9:02am 1696881727

It may well be the top...or not ( I doubt it...energy extraction costs rise at 8% or so a year). However, there are many who are holding on for dear life at the rates now...hoping lower rates are just around the corner to provide relief. The question is...how long can they hold out if rates do not come down, let alone increase?

And then there will be plenty of housing supply.

by Yvil | 10th Oct 23, 9:03am 1696881828

Agreed on the loan servicing difficulties, but not on the excess supply part. High immigration means demand is outstripping supply.

by rastus1 | 10th Oct 23, 9:13am 1696882407

Supply of houses for sale. Created from forced (or reluctant ) sale as the mortgage and inflation bites. A reset of prices that 'work' with current costs.

by HouseMouse | 10th Oct 23, 9:16am 1696882616

Not so sure. There’s broad demand pressures, then there’s ‘realisable’ demand pressures, in terms of house buying (as opposed to renting). The former is driven by population growth, the latter is driven by affordability, including the cost of finance. The former is strong, the latter much more moderate.

by Juzz | 10th Oct 23, 9:08am 1696882106

We bought our first home last month, love the place and are making improvements already. We bought despite being fairly certain interest rates would continue to increase and house prices to at best stagnate. The thing is the real damage happens around the time the RBNZ reduces OCR and unemployment is rising steadily. That's when nominal values will drop

by Yvil | 10th Oct 23, 10:27am 1696886842

Good on you, I hope you will be very happy in your own house.

by Baywatch | 10th Oct 23, 8:35pm 1696923331

Well the bit you own for now...(front door and stairs)?

by Iceman | 10th Oct 23, 9:19am 1696882742

Don’t bother with this crowd mate. I’ve noticed the DGMs will continue to preach and proclaim doom no matter what, without actually leaving their armchair and being in the market.

by Dgm | 10th Oct 23, 12:13pm 1696893186

Go out and buy/borrow with frenzy

by Iceman | 10th Oct 23, 12:48pm 1696895287

Your intelligence and credibility just shines more and more with every comment. I’m starting to believe you are just a high school kid, or has an IQ of one.

by Dgm | 10th Oct 23, 1:06pm 1696896397

You looked at the mirror when typing that.. unbelievable, when you describe yourself..

by Baywatch | 10th Oct 23, 8:37pm 1696923432

Iceman because he's ice cold and doesn't make any mistakes.

by Iceman | 10th Oct 23, 9:34pm 1696926876

Another brainless comment.

by Joe Smith | 10th Oct 23, 10:09pm 1696928989

IQ is relatively insensitive to age.

by HGWR | 10th Oct 23, 1:30pm 1696897823

This critique makes no sense, obviously those who believe the market is overinflated and likely to fall further won't be buying into it. Am I also disqualified from thinking gambling is foolish because I'm not on the pokies several nights a week?

by huttman | 10th Oct 23, 10:11am 1696885893

even if the house drop another 20%, those who made those comments will still complain about it. There is a reason some people will never be on the ladder.

by lucenera | 10th Oct 23, 1:18pm 1696897131

You just caused my gallbladder to overflow.

Being "on the ladder" means just that, is not a merit. Surely doesn't mean that you worked harder or are more skilled.

Some people just don't want that.

Most people can't afford it, and can't do ANYTHING to change that.

What would be the reason you are referring to?

by Sluggy | 10th Oct 23, 2:21pm 1696900896

It's more of a treadmill than a ladder.

by Noncents | 10th Oct 23, 10:50am 1696888229

In NP, smaller/older homes (<750k) seem to be turning over just fine. Its the 4x2 mcmansions that seem to be dropping - based on houses in our suburb, they are down from $1.2m to well under $1m now. One last week with a motivated owner was sub $900k

by JimboJones | 10th Oct 23, 12:19pm 1696893590

Are we talking decent mcmansions on good sections, or new builds on smallish sections where the main value is that they are new and shiny? The latter will always go down eventually, although I am amazed how long it can take...

by Noncents | 10th Oct 23, 1:39pm 1696898345

A mix. Its a smallish Subdivision that releases 10-15 sections every 3 years or so. Houses range from 15 years to currently under construction.

The older properties have slightly larger sections (900-1000m) and tended to be built by independent builders.

The newer ones are around 750-850m and are mostly franchise builders.

Most are under transmission lines and are pretty bog-standard in terms of design/build. Although there are a few exceptions (but these have never come on to the market)

Hardly what young me envisiged as a dream home if I won Lotto.

by IT GUY | 10th Oct 23, 10:49pm 1696931348

Sounds lime Bonney donn

by GenX | 10th Oct 23, 9:47am 1696884475

We are there or thereabouts regarding the bottom. There is a backlog of buyers and sellers. More importantly rents have risen and are rising quickly. That means more new prospective buyers. On the other hand forced sales are increasing, but they will just be lapped up by those who have continued to save. This relates to Auckland. The rest will follow in due course.

by Noncents | 10th Oct 23, 10:51am 1696888310

The demand seems to be there, the access to credit not soo much.

by Retired-Poppy | 10th Oct 23, 11:49am 1696891749

For the sake of transparency, the demand from FHB's is certainly there however, access to cheap credit (sub 3%) has been cut off.....

Many who bought at or near recent highs honestly thought cheap credit was here to stay.

Flooding the place with immigrants while houses are still overpriced will more than likely cause more instances of overcrowded houses than sustainable or meaningful house price appreciation (falls when adjusted for inflation).

by Nzdan | 10th Oct 23, 11:48am 1696891728

Even those who are qualified and derive an income from approving and writing out those mortgages thought cheap credit was here to stay. If not then they were predatory.

Unfortunately the young naïve borrowers are left carrying the can. Seems mortgage lending is one of the few segments of our society with little consequences for blasé risk analysis, where a product results in massive losses for their clients. "Accidental" bait and switch.

by Retired-Poppy | 10th Oct 23, 12:10pm 1696893036

.....yes indeed. If caught out, house ownership can be life altering for all the wrong reasons.

by Mr Ed | 10th Oct 23, 10:34am 1696887258

Quite Valueless (QV) the rear vision statistical experts and data collectors .

by Zwifter | 10th Oct 23, 10:43am 1696887824

As predicted the bottom was August to October. I'm expecting 3 to 4% annual house price growth so basically back to historical norms. Interest rates are pretty much back to normal as well but if the inflation figures allow it, expect a small drop in the OCR next year.

by Amokk | 10th Oct 23, 11:57am 1696892271

Oh, absolutely! It's like a fairytale, really. Just a casual dip in August to October, and now we're all set for a dazzling 3 to 4% annual house price growth, just like the good old days.

In the real world - obtaining finance remains a challenge, the cost of living is hurting everyone and interest rates refuse to budge except to go upwards. Naturally, house prices will continue to increase Z. Thank you for your god-like financial advice.

by Zwifter | 10th Oct 23, 2:41pm 1696902083

Thanks for that, its free advice. Covid was the wake up call for me, I predicted that house prices would FALL 25%, seemed pretty obvious to me and then the RBNZ stepped in and dropped its pants. Now my belief is the property market is untouchable.

by JimboJones | 10th Oct 23, 12:24pm 1696893872

Why would anyone buy an investment property right now with yield so low? You keep telling us how great TDs are!

Why would house prices go up without the investor demand?

Why would a FHB buy when renting is about half price at the moment?

At some stage something has to give doesn't it? I can't think of a time when rents/yields have been so out of sync with property prices.

by interesting1234 | 10th Oct 23, 12:44pm 1696895043

It depends on who and what you know. For example picking up a rental in Picton right now is opportunistic, with 2000 workers needed to build the new wharf for the new ferries, there are outfits signing 2 year lease agreements for hefty rent prices just to secure a place for the workers closer to the work site. Places also getting signed up to this all over Blenheim. If anything it would help offset the current high interest rates until things taper down a little within 2 years time. Likely by then the owners will have had pay increases, or better jobs attained in order to better help pay down the mortgage.

by JimboJones | 10th Oct 23, 12:55pm 1696895729

Maybe there are a small amount of properties that make investment sense, but surely a tiny fraction of the current properties on the market yield more than a TD will after expenses.

by 1harlow1 | 11th Oct 23, 3:01pm 1696989673

Looks a bit like the bull trap to me..

https://www.researchgate.net/figure/Main-Stages-in-a-Bubble-Rodrigue-nd…

Returning to "normal"..

by JimboJones | 10th Oct 23, 11:57am 1696892236

"The average value of New Zealand homes was $899,256 in the September quarter, up just 0.9% compared to the June quarter according to QV's House Price Index."

Just 0.9%? Isn't that about 4% annualised? That sounds like a big problematic increase, not "largely flat". More than 50% of NZ are expected to vote for that increase, so I guess that is just democracy at work.

by huttman | 10th Oct 23, 1:26pm 1696897610

prices are always fluctuating, a 0.9% change is rather a small one.

by 1689 Baptist | 10th Oct 23, 12:38pm 1696894691

A 1.6% quarterly increase in Auckland is significant. Auckland trends tend to lead the rest of the country.

by unaha-closp | 10th Oct 23, 4:32pm 1696908750

House prices in Auckland are now increasing at the same rate as general inflation.

by IT GUY | 10th Oct 23, 10:48pm 1696931283

watch interest rates not prices you fools, this is not the bottom