The New Zealand housing market has experienced a flat summer despite falling interest rates, according to Quotable Value (QV).
The latest QV House Price Index Report shows the average value of New Zealand homes was $912,904 at the end of February. That's up 0.5% compared to three months earlier, but down 1.4% compared to the end of February last year, and down 14.1% from the market peak in in 2021.
QV Operations Manager James Wilson said the latest figures were the flattest they had been over summer in the last six years, since the three months ended February 2019 when average values increased by just 0.4%.
"After some pretty significant volatility throughout the past half decade, the housing market now appears to have well and truly stabilised," Wilson said.
"We're no longer seeing so many significant shifts up or down, with home values staying steady as she goes over summer, despite falling interest rates and a spreading expectation that we're now through the worst of it," he said.
However, there were regional variations.
In the main centres average values were up in Auckland 0.6%, Tauranga 1.6%, Wellington 0.3% Christchurch 0.9% and Dunedin 0.3%. They were unchanged in Hamilton.
"Although interest rates have come down notably in recent months, the resulting increase in demand is being partially offset by a slowdown in population growth and a large surplus of properties for sale," Wilson said.
"Affordability issues are still evident in the main centres in particular, with unemployment still being of major concern for many kiwis," he said.
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7 Comments
As long as house prices are overpriced, there will be downside momentum in the housing market..
If the housing market did not feel the warmth in summer, it's sure to feel the chill this winter
Higher prices are the cure for higher prices, unless it’s like the diamond trade where there’s artificial supply restrictions. "water and wastewater capacity constraints, impacting developers".
I’m speculating, but I think the council knows there’s an oversupply issue, and they’re trying to stop the bleeding, so developers can have a chance at selling inventory that’s been sitting for over a year.
Trade Me could be at 50K listings next week. Up from 17K in 2021.
The speculation about council helping the developers does not make any sense commercially.
And you are giving councils far too much intellectual credit than they could every have.
The fact is, councils have completely mismanaged their (our) infrastructure and developers have been caught up in a dysfunctional boom and bust system, the present results of which was the obvious conclusion.
Wouldn’t higher land prices benefit council revenue? Developers pay a contribution based on land price, right?
So peak summer and lower rates, with the promise of more and its a Shakespearean play, Much to do about nothing.
Popcorn
"Much to do about nothing"
I think it's "much ado about nothing"
This was the first test for the Govts new housing affordability policies.
That is, for the likes of interest rate falls not lead to excess consumer demand over supply and push prices up.
And on that they passed the first test.
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