CoreLogic’s Home Value Index (HVI) showed that the property market continued to decline in September, with values dropping by 0.5%. This is the seventh month in a row that values have fallen. Since February, the total decrease is 4.7%, which means homes are worth about $39,399 less than before, going from $844,825 to $805,426.
Even though prices are still about 16% higher than they were before COVID-19 in March 2020, they are almost 18% lower than the peak reached after the pandemic.
Different areas had mixed results in September: Hamilton fell by 1.2%, Auckland by 0.7% (over 7% total recently), and Wellington by 0.5%. However, Tauranga’s drop was only 0.3%, Christchurch stayed the same, and Dunedin increased by 0.1%.
Kelvin Davidson from CoreLogic NZ said that the data shows a slow and uneven market across the country. He noted that lower mortgage rates are helping improve feelings in the housing market, but this hasn’t yet led to higher prices. While property values might be close to bottoming out, caution is needed because housing is still expensive for many, there are many homes for sale, and job numbers are not strong.
The Reserve Bank is expected to make an important announcement about interest rates in early October, likely cutting rates again. This could lead to lower mortgage rates continuing into 2025. However, new rules on borrowing could limit how much people can buy, which might slow any future price increases.
In Auckland, most areas saw drops in home values, with decreases from 0.4% to 0.9%. Overall, the Auckland market is showing weakness, with values at least 1.8% lower than last year. Auckland City has only increased by 4.4% since March 2020, showing that the strong demand after COVID-19 is fading, likely due to high prices and uneven interest in apartments.
Source from corelogic.co.nz: https://www.corelogic.co.nz/news-research/news/2024/rate-cuts-havent-pumped-up-house-prices-yet?utm_medium=email&utm_source=newsletter&utm_campaign=nz-res-hvi-2024-oct&sid=
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