The slowdown we’ve already seen through much of 2024 continued in September, with CoreLogic’s Hedonic Home Value Index (HVI) showing values fell another 0.5% across the board. national. This is the seventh consecutive monthly decline and since February, declines now total a total of 4.7%, reducing values by $39,399 from $844,825 to $805,426.
To be fair, it is also worth noting that values are still around 16% higher than March 2020 (pre-COVID-19) levels. But they remain almost 18% lower than the peak reached at the height of the post-Covid boom.
The main centers were rather mixed in September, with:
- Hamilton down 1.2%
- Auckland by a further 0.7% (bringing recent falls in the supercity to a total of more than 7%)
- Wellington by 0.5%.
- Tauranga saw a more modest decline of 0.3%
- Christchurch was flat and Dunedin edged up 0.1 per cent.
Auckland is a pretty interesting market right now. Some analysts expected this to lead to a national recovery in house prices, but in fact it turned out to be at the forefront of the recent downturn. In each of the submarkets, declines from the post-COVID peak ranged from approximately 21% (North Shore and Franklin) to 25% (Waitakere). And since the recent cyclical peak earlier this year, Auckland City and Papakura have fallen by around 8 per cent.
It’s also very interesting to note that compared to March 2020 (pre-COVID), Auckland City’s median property value has only increased by 4.4%. In other words, there’s not much left of the post-COVID boom in this market, perhaps reflecting affordability constraints in the more expensive suburbs, but potentially also uneven demand for apartments.
As always, results were varied across ‘provincial markets’ in September, with Gisborne, Napier and Hastings all falling by more than 1 per cent, but Queenstown held steady, while Nelson and Invercargill rose slightly. Affordability certainly stands out as a support for the Invercargill market, with its median property value still below $500,000.
Overall, the latest data showed that real estate values remain generally sluggish across the country.
And although there are signs that falling mortgage rates have started to increase feeling on the real estate market, the effects have not yet been reflected significantly in concrete price indicators.
To be honest, it wouldn’t be surprising to see property values hit an all-time low soon, as the effects of falling interest rates really start to show. But it also doesn’t necessarily mean that the next recovery will begin immediately. After all, we still face housing affordability challenges in most parts of the country, a high inventory of listings on the market and, of course, job losses.
Financing-approved buyers still have the upper hand when it comes to negotiations, and while a gradual increase in sales volumes through 2025 may begin to slowly reduce the number of listings, buyer choice will likely remain high for some time. time again.
It’s also worth noting that the downward trend in mortgage rates will also bring forward the timing of when new debt-to-income ratio restrictions begin to come into play. The DTI rules went live on July 1stbut will become more relevant as borrowing capacity improves alongside falling interest rates, suggesting that any rise in house prices next year may be more moderate than in the past.
If you want to dig deeper into how property values are trending in your area, CLICK HERE to access the latest CoreLogic Home Price Index (HPI). This comprehensive report provides valuable insight into property value trends in New Zealand and can help you make informed decisions.
The Mortgage Supply Co is here to guide you through every step of your real estate journey, whether you are looking to buy, sell or refinance. Contact the team today to discuss your unique situation and how we can help you navigate an ever-changing real estate market!
