House prices down more than 10% from June 2022

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Photo: RNZ / Marika Khabazi

House prices have fallen yet again as higher interest rates continue to limit demand for properties.

CoreLogic’s latest house price index showed property values fell 1.2 percent in June, down 10.6 percent from a year ago.

It compared to the 0.7 percent fall in May, which was down 10.2 percent from May last year.

CoreLogic said the monthly decline in June was led by Auckland, which fell 3 percent for the month, with four out of six main centres recording larger falls during the month.

Head of research Nick Goodall said the latest data may be a speed bump for expectations the housing downturn may have already ended.

But he said the variable results across the country supported the argument that a housing market trough was not far away.

“Rather than focus too much on the exact timing of the bottom of the market, we believe it’s more about assessing the key market drivers and recent changes in those drivers, when setting expectations of where the market is headed,” Goodall said.

Despite the recent downward trend, the average house value was $183,000 higher than the pre-Covid level in March 2020.

The average value has fallen $130,000 from the peak of the market.

“The flow of properties being listed for sale has been weak all year – tracking below each of the past three years. This, alongside property sales ticking higher, has meant the overall volume of properties on the market is reducing,” Goodall said.

He said reduced supply, along with the arrival of more migrants, increased confidence, looser credit requirements and near-peak mortgage rates have supported recent demand.

But he was not expecting a strong bounce back in prices.

“Stretched affordability, due largely to still-high property values and high interest rates compared to recent history is likely to keep a lid on demand, which should lead to a much more stable and balanced market once the bottom is reached,” Goodall said.

Average house value vs a year ago – Corelogic

New Zealand – $911,222, down 10.6 percent
Auckland – $1,265,438, down 12.5 percent
Hamilton – $803,275, down 8.8 percent
Tauranga – $1,023,618, down 12.1 percent
Wellington – $890,451, down 17.2 percent
Christchurch – $731,964, down 6.5 percent
Dunedin – $618,271, down 9.4 percent