The downturn that we’ve already seen for a fair chunk of 2024 continued in September, with CoreLogic’s hedonic Home Value Index (HVI) showing values dropped by a further 0.5% nationally. That was the seventh monthly fall in a row, and since February, the declines have now reached a total of 4.7%, reducing values by $39,399, from $844,825 to $805,426.
To be fair, it’s also worth noting that values are still around 16% higher than the March 2020 (pre-COVID) level. But they remain almost 18% below the peak at the height of the post-COVID boom.
The main centres were something of a mixed bag in September, with:
- Hamilton down by 1.2%
- Auckland by a further 0.7% (pushing up the recent falls across the super-city to a total of more than 7%)
- Wellington by 0.5%.
- Tauranga saw a more modest drop of 0.3%
- Christchurch was flat, and Dunedin edged up by 0.1%.
Auckland is quite a striking market at present. Some analysts had been expecting it to lead a national recovery in house prices, but in the event, it has actually been towards the forefront of the recent downturn. Across each of the sub-markets, the falls from the post-COVID peak have ranged from around 21% (North Shore and Franklin), up to 25% (Waitakere). And since the more recent cyclical peak earlier this year, both Auckland City and Papakura have dropped by around 8%.
It’s also really interesting that compared to March 2020 (pre-COVID), Auckland City’s median property value has only risen by 4.4%. In other words, there’s not much left of the post-COVID boom in that market, perhaps reflecting affordability restraints in its more expensive suburbs, but potentially also patchy demand for apartments.
As always, there were some varied results across ‘provincial markets’ in September, with Gisborne, Napier, and Hastings all dropping by more than 1%, but Queenstown was flat, while Nelson and Invercargill inched higher. Affordability certainly stands out as support for Invercargill’s market, with its median property value still sub-$500,000.
All in all, the latest data showed that property values generally remain sluggish across the country.
And, although there are signs that lower mortgage rates have started to boost sentiment in the housing market, the effects are yet to meaningfully flow through to hard pricing indicators.
To be fair, it wouldn’t be a surprise to see property values bottom out shortly, as those effects of lower interest rates do really start to show. But this doesn’t necessarily mean that the next upturn will start straight away either. After all, we’ve still got stretched housing affordability in most parts of the country, an elevated stock of listings on the market, and of course some job cuts too.
Finance-approved buyers still have the upper hand when it comes to negotiations, and although a gradual rise in sales volumes into 2025 may start to slowly reduce listings counts, buyer choice will probably remain elevated for a while yet.
It’s also worth noting that the downwards trend for mortgage rates will also bring forward the timing for when the new debt to income restrictions start to bind. DTI rules went live on July 1st, but will become more relevant as borrowing capacity improves alongside lower interest rates, suggesting that any house price upturn next year could be more muted than in the past.
If you’d like to dive deeper into how property values are shifting in your area, CLICK HERE to access the latest CoreLogic House Price Index (HPI). This comprehensive report provides invaluable insights into property value changes across New Zealand and can help you make informed decisions.
The Mortgage Supply Co is here to guide you through every step of your property journey, whether you’re looking to buy, sell, or refinance. Reach out to the team today to discuss your unique situation and how we can help you navigate the ever-changing property market!
