QV expects a slow recovery in the housing market next year

Property / news

The average value of NZ homes increased 2.3% over the three months to the end of November

19th Dec 23, 5:00am by Greg Ninness

Quotable Value expects there to be a "slow recovery" in the housing market next year.

The average value of New Zealand homes was $914,017 at the end of November, down 3.3% from where it was at the start of the year. However, that's up 2.3% over the three months to the end of November. (See the table below for the regional values).

Only three of the 16 main urban centres had higher average values at the end of November than they did at the start of the year - Rotorua +3.2%, Queenstown +2.1% and Invercargill +1.5%.

The centres with the biggest declines in average values since the start of the year were Whangarei -7.4% and Tauranga -6.3%.

"The residential property market has been a rollercoaster ride since Covid-19 first reared its ugly head on these shores, with more ups and downs than the entire decade prior," QV operations manager James Wilson said.

"This year, home values continued to fall for the most part, stabilised, and now appear to be slowly strengthening again.

"But rather than the start of another major uplift in values, I expect we'll see a return to a more typical sort of housing market in the year ahead, with slow growth, and days to sell and listing numbers eventually returning to historic norms.

"High interest rates currently have a stranglehold on the market and the economy as a whole, which won't alleviate any time soon judging by the Reserve Bank's most recent announcement.

"This is going to continue to put a damper on things next year, as it's been designed to do," Wilson 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.

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.

63 Comments

by Flying high | 19th Dec 23, 7:13am 1702923229

Whats pushing the prices in Rotorua... some old geezer (geyser) I suppose

by nktokyo | 19th Dec 23, 8:14am 1702926849

Ever tried to get a consent through Rotorua Lakes Council that wasn't for KO?

Good Rotorua developers build houses in Hamilton and Auckland now.

by Colin Cameron | 19th Dec 23, 10:37am 1702935434

Yes I know of one who had a major head ache trying to do a three dwelling development and she vowed and declared never again. Most to do with geothermal land wether it was or not. And the engineers hers against council it wasn't cheep

by Flying high | 19th Dec 23, 1:02pm 1702944146

Nope and it sounds like its not worth trying. Mayor Tania Tapsell (from memory) stood for the gnats didnt she (?) and should be growth focussed.

by Black and White | 19th Dec 23, 8:58am 1702929512

Don't think we have seen the bottom yet.

The reality of no laundered money no printed money and high interest rates will be very grim for NZ next year.

On top of that a very average government that has us in recession already with poor leadership and know vision I only see average to below going forward.

Maybe we can find normal again in this crazy world.

by Yvil | 19th Dec 23, 9:10am 1702930242

"a very average government that has us in recession already"

Are you blaming the recession on the new government?

by danicriss | 19th Dec 23, 10:50am 1702936218

The upcoming one(s), yes

by WellingtonInvestor | 19th Dec 23, 4:04pm 1702955049

I would put a lot of blame on National from their last 3 terms in parliament, which has resulted in a lot of the problems we see today. eg under investment in infrastructure, and not bringing in things like a CGT to better balance the tax system etc

by Black and White | 19th Dec 23, 8:06pm 1702969613

John Key was the king of Laundered money.

The down fall of this country started after the GFC.

Not saying the last lot was any better with their printed money.

Time to take the medicine NZ.

This won't be fun.

by Flying high | 19th Dec 23, 6:17pm 1702963024

Much like a child now aged 52 still blaming their parents that life did not turn out well

by Matt_09 | 19th Dec 23, 9:30am 1702931440

Haha ‘blackandwhite’ you’ve just lost all credibility, forever!!

by Black and White | 19th Dec 23, 4:43pm 1702957436

Yes Matt

Most people don't like the truth these days

by Rampart | 19th Dec 23, 10:23am 1702934619

😂

by Smudge02 | 19th Dec 23, 11:06am 1702937209

I dont think we will ever find "normal". 2024 will be a train wreck, eventually the RBNZ will cave and slash rates. Minions will pour into property and 'feel' wealthy. Young NZ'ers will continue to leave NZ to chase the lifestyle they will never be able to afford here, a lifestyle many of us enjoyed here in a different NZ, simply because we were born at the 'right' time.

Rinse and repeat is our normal.

by Thats All Folks | 19th Dec 23, 7:14am 1702923254

Nothing to see here, next year will be totally honky dory.

Business as usual people, stay calm and keep buying!

by tothepoint | 19th Dec 23, 2:41pm 1702950109

Hi Thats All Folks,

I expect you're trying to be cynical with your comment above....

But, ironically, the comment might well turn out to be pretty accurate. Anyway, time will tell.

Best wishes to all for a relaxing festive season.

TTP

by 1689 Baptist | 19th Dec 23, 7:22am 1702923778

From memory, after the GFC house prices fell 25% but were then flat for 3 years. It wouldn't surprise me if we see a similar pattern now.

by Flying high | 19th Dec 23, 7:27am 1702924031

Locality dependent as I recall. The regions did not recover until 2015 while aucklnd was 2012, chch waited until 2020

by Yvil | 19th Dec 23, 8:37am 1702928254

Baptist, after the GFC, NZ house prices fell 10.5%.

by 1689 Baptist | 19th Dec 23, 8:41am 1702928472

Thanks. I was twenty when it happened so can't recall the exact pattern

by HughJorgan | 19th Dec 23, 8:55am 1702929356

Unlike the GFC we have had a ton on money printed. That’s the great unknown.

by rolande | 19th Dec 23, 9:35am 1702931741

Nominal or real? From memory that decline took about 3 years? So possibly 15% real?

by M0ralHazard | 19th Dec 23, 7:45am 1702925122

The only way I can see house prices rising significantly (>5% per year) is if interest rates drop back down (i.e. 2yr fixed between 5-6%). But that all depends on why interest rates are dropping. Is it a "soft landing" or the economy going down the toilet and unemployment shooting up?

by Blackdog | 19th Dec 23, 8:13am 1702926827

give it 6 months

by Kauri | 19th Dec 23, 7:52am 1702925545

I wonder how the projected massive council rates increases will impact prices. A few years of 10% plus rate rises and they'll have doubled before the decade is out. While TOP didn't get in with it's land tax, by the time you're paying close to 10k pa for rates on a modest home it'll sure feel like a land tax.

by Blackbeard | 19th Dec 23, 8:03am 1702926195

Well, I guess someone has to pay those 6 figure councillor salaries.

The greedy buggers should all take a pay cut. At least have the management of council accounts external. You can’t have them voting themselves pay rises every year. Also cut the staff quota in half.

by Nzdan | 19th Dec 23, 8:40am 1702928402

Plus we have 67 water authorities to pay for, each with their own management structure, vehicle fleet etc. In Hawkes Bay (a population of 180k) there are 5 alone:

Central Hawkes Bay District Council
Hawkes Bay Regional Council
Napier City Council
Hastings District Council
Wairoa District Council

by Blackbeard | 19th Dec 23, 9:53am 1702932815

Yip, I hear you. NZ population is the same as a small US city, and they manage with a council staff count of 1% of what we have. NZ councils are all about self entitlement, intentional bureaucracy, intentional inefficiencies. Pigs drinking from the trough.

by Whatwillhappen | 19th Dec 23, 9:02am 1702929731

I couldn't let this comment stand unchallenged - councillors aren't paid very much, In Auckland only, a councillor's minimum salary is $107k - a senior policy analyst in central government gets about that. In Christchurch this minimum is $64k. A graduate policy analyst in central government gets paid that.

Except for the Chatham Islands, the lowest councillor remuneration is currently now pegged to a half time equivalent of about two thirds of the average wage. In the case of the smallest councils this breaches our governance remuneration pool approach and means that the resultant governance pool needs to be increased to reflect the current number of councillors, rather than the ranking of the council on the size index.

Link

by refactornz | 19th Dec 23, 12:02pm 1702940529

And what about the median and maximum salaries?

by Colin Cameron | 19th Dec 23, 10:39am 1702935583

Kauri you raise a very good point. And that is the great unknown I feel.

by Sluggy | 19th Dec 23, 12:38pm 1702942707

The price of success in our rockstar economy !!

by 1689 Baptist | 19th Dec 23, 1:36pm 1702946218

It amazes me, how many people think that LVT wont affect rents. With the average gross yield at 3%, landlords will on charge 100% of the LVT/rate rise to the tenant in less than 12 months. There is no margin to absorb it. An LVT is a tax on everybody for having the audacity of not living in a caravan.

by Nzdan | 19th Dec 23, 4:08pm 1702955282

by kiwikidsnz | 18th Dec 23, 5:45pm

Roughly 75% of NZ rentals are provided by private landlords.

Rents are well demonstrated to be set by peoples ability to pay, not by landlords capital, interest, maintenance or other costs in providing the accommodation. Therefore for everyones long run benefit policy efforts would be more effectively directed to raising average income level rather than subsidising tenants (accommodation supplement) & inefficient uncompetitive employers (WFF).

by Dgm | 19th Dec 23, 8:08am 1702926525

"This is going to continue to put a damper on things next year, as it's been designed to do," yup, it will... there are many out there struggling to meet repayments

by huttman | 19th Dec 23, 11:23am 1702938212

according to statistics, 1/3 households are having mortgage. 1/3 are paying rent. 1/3 don't are freehold.

maybe some people are finding it hard, but many more are coping just fine.

by redcows1 | 19th Dec 23, 8:15am 1702926917

House inflation is back baby.

It's so good

by ex agent | 19th Dec 23, 8:59am 1702929550

What about those just entering the housing market. Young families who have struggled to grow a deposit for their first home. If there is house price inflation next year I hope it is minuscule. Why do people just think about themselves?

by redcows1 | 19th Dec 23, 9:10am 1702930246

Sorry. Should have put a sarc. in there.

I absolutely abhor house price inflation and have zero respect for the fact that a physically depreciating asset can appreciate in value, it makes no long term economic sense for the country. And I particularly abhor the language used in media that gloss's over the fact that it is inflation and it does have HUGE negative impacts both micro and macro.

TBF you probably are correct I probably am thinking about myself as I currently don't own property.

by donny11 | 19th Dec 23, 9:46am 1702932381

That's our Kiwi extraordinary popular delusion for you. A key necessity of life (shelter) becoming more expensive and unaffordable for many is somehow a good thing? Because of the magic & mysteriousness of the "wealth effect".

by wingman | 19th Dec 23, 11:26am 1702938413

If it's so easy and the road to riches, why aren't you doing it?

by swapacrate | 19th Dec 23, 11:55am 1702940127

It was easy its hard now. How hard to buy a house and have a ready made market, where all you do is sit in a house and the price goes up.

A proper business you have to test the market, build a brand, start breaking even, keep building the brand, stay on top of your costs, constantly adjusting your margins while trying to make a profit. Building a brand is so hard.

by wingman | 19th Dec 23, 1:13pm 1702944793

Buy a couple of houses then and get rich...as you say. What's stopping you?

by mfd | 19th Dec 23, 1:57pm 1702947474

Maybe he's(?) able to see the likely poor future returns in housing?

It's a crowded trade. One for the unimaginative willing to put up with mediocre returns, at best.

by wingman | 19th Dec 23, 2:10pm 1702948236

I've made a fortune out of property, but it's risky. There's always financial 'experts' here telling us how easy it is to make money on property....if it's that easy...have a go!!!!

I had a lot of debt many years ago when interest rates shot up to 22%...think how much fun that was.

by mfd | 19th Dec 23, 2:28pm 1702949338

You've made a fortune through a raging long term cyclical bull market in property - interest rates falling, prices rising, poor policies on housing supply. Right place, right time.

To think the future returns will look like the past you have to think interest rates are going to go seriously negative and politicians will remain just as useless on housing supply. I'll admit the latter is a reasonable bet, at least.

For full disclosure, I own my home and have owned a rental property which I have now sold. My share portfolio has done far better than my property (although some of it is in REITs which look like enormously better value than buying a rental property right now)

by Yvil | 19th Dec 23, 3:15pm 1702952119

Wingman, many think when others get rich, it's because it was easy, they were "born at the right time" but if you suggest they could give it a go, then they think it's suddenly become a lot harder!

by wingman | 19th Dec 23, 3:37pm 1702953464

Correct!

I took a huge punt on West Harbour in Auck when there was nothing there. When I was building my second house, a guy walked up to me and said..."nothing will ever happen out here".

by Yvil | 19th Dec 23, 5:15pm 1702959334

"a guy walked up to me and said..."nothing will ever happen out here".

That is the same guy who tells you today: "you got lucky"

by wingman | 19th Dec 23, 4:14pm 1702955670

Not if you do it right - find out where development's going to occur, where the roads are going to be upgraded, where new shops, retirement villages are likely to be built, where the big developers have been sniffing around, access to highways and shopping centres etc.

by agnostium | 19th Dec 23, 4:43pm 1702957395

We've lived through the biggest windfall in human history by discovering cheap and readily available fossil fuel, in particular oil.

There is no skill in it, it's been a fluke and we've burnt through the jackpot. The money you've earnt isn't tethered to it's real value (energy) and will come unstuck soon.

When you ask? Next year? Unlikely. Next decade? Definitely.

by Nzdan | 19th Dec 23, 4:23pm 1702956219

Made a $400k CG after 4 years of living in our 1st home bought in 2017 (after deducting $50k deposit and $150k initial mortgage). It was so easy.

But because I'm a sucker, I chose to recycle that gain into a forever family home on a 1/4 acre section, close to schools, town and commuter transport. For some reason though, the bank/valocity is saying we're down about $100k on 2021 purchase price.

Do you know when we'll get rich again and make our next $400k?

by the Joneses | 19th Dec 23, 12:35pm 1702942513

It is good that houses are going up in price because loads of wealthy people have invested in them, and they are becoming more wealthy. Increasing inequality and effectively trapping people in rental houses. Who cares if regular people can afford their own home? I am sure some doom and gloom merchants might, but not the mainstream economists and commentators, that is for sure.

by wingman | 19th Dec 23, 8:17am 1702927034

Well done to all those that bought earlier this year.....the bottom's in.

by Whatwillhappen | 19th Dec 23, 8:55am 1702929338

Taken on its own, 2.3% over 3 months is annualised growth of 9.2%, which in a decade elsewhere in the world would be considered obscene and bubble territory.

by General Comment | 19th Dec 23, 8:59am 1702929596

"Prices doubling in 8 years! Everybody into the pool!"

by phalanax | 19th Dec 23, 9:05am 1702929954

Love it how some people have taken to putting lipstick on the pig.....lol

by Zwifter | 19th Dec 23, 10:42am 1702935763

Houses where I am now selling only 1% below the RV. Homes has the price UP for another month but one roof slightly down, the two numbers set to merge.

by 1689 Baptist | 19th Dec 23, 1:39pm 1702946354

whereabouts are you based Zwifter?

by Zwifter | 19th Dec 23, 1:54pm 1702947256

Hopefully where nobody on here can find me.

by 1689 Baptist | 19th Dec 23, 2:06pm 1702948017

lol. Fair enough.

by Zwifter | 19th Dec 23, 2:23pm 1702949027

A place called Bunkersville.

by Yvil | 19th Dec 23, 5:17pm 1702959450

"Hopefully where nobody on here can find me"

Why? What are you afraid of?