House prices stabilising as market confidence increases

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Average values have fallen 13.2 percent from their March 2022 peak but remained 24.3 percent higher than pre-Covid levels.
Photo: RNZ / Nate McKinnon

Flatlining property values may be a sign that the 17-month-long downturn has ended, property research firm CoreLogic says.

The firm said national average home values stabilised at $905,445 in September, with the three-month change sitting at 0.6 percent.

Average values have fallen 13.2 percent from their March 2022 peak, however, remained 24.3 percent higher than pre-Covid levels.

CoreLogic NZ chief property economist Kelvin Davidson said despite the overall flattening in prices, the market remained patchy, with price increases in some regions that were not seen in others.

Auckland saw a 0.4 percent rise in values – the city’s first increase since March 2022.

“It was only a matter of time until property values found their floor and then started to rise again, and it’s this emerging growth we’re starting to see in the data, although there’s quite a bit of diversity across the country,” he said.

“Housing market confidence seems to have turned a corner, supported by a rough peak for mortgage rates, high net migration flows, a still-solid labour market, and an easing in credit conditions.”

Values in the wider Wellington area were flat in September but edged up 0.2 percent in Christchurch and Dunedin.

The potential signs of a turning point were not seen in Tauranga and Hamilton, where values continued to fall by 1.2 percent and 1.5 percent respectively.

Davidson said this price “patchiness” among the main centres may continue in the coming months, and was likely to be a feature elsewhere in the country.

“After all, while we have broadly reached a trough in the market, we’re not expecting the next phase of growth to be swift or sudden either given mortgage rates remain challenging for many households,” he said.

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