New Zealand's housing market saw a modest rebound in the November quarter, with national home values rising by 0.3%, according to the latest QV House Price Index.
This is the first quarterly increase since April, though the market remains subdued compared to its peak three years ago. The average home value now stands at $908,173, still 0.7% lower than a year ago.
QV operations manager James Wilson commented on the modest recovery.
“Time will tell whether or not we’re finally witnessing the modest beginnings of the housing market’s long-awaited rebound or whether this is just another small bump in what has been a remarkably bumpy road in recent years,” Wilson commented.
According to QV data, several major urban centres saw modest gains.
Auckland increased by 0.5%, marking its first positive quarter since January, while Hamilton led with a 1.2% rise. Christchurch and Dunedin also experienced small increases of 0.3% and 0.7%, respectively. Napier saw a 0.9% uptick, suggesting a potential rebound for Hawke’s Bay, NZ Adviser reports.
However, Tauranga (-1%) and Wellington (-0.9%) continued to experience value declines, though at a slower pace than in previous quarters.
Wilson attributed the slight recovery to the stability of interest rates and improved market sentiment.
“Interest rate reductions have certainly paved the way for a general uplift in activity and market sentiment across much of the country. But with such a large supply of homes for sale, demand isn’t yet converting into significant price pressure,” he said.
Although the November data indicates signs of stabilisation, economic challenges remain.
Inflation, job insecurity, and a high property supply are limiting price growth. Wilson emphasised concerns over these persistent issues.
“These are still pretty major factors today and will also continue to play a pivotal role in hampering any significant home value growth as we move into 2025, even as mortgage rate relief finally sets in,” he added.
With just one month left in 2024, New Zealand’s housing market is set for its slowest calendar year in more than a decade. While anticipated interest rate cuts in 2025 could provide some relief, Wilson stressed that supply continues to outpace demand.
“Looking ahead, there’s still very little to suggest that house prices will suddenly take off any time soon, with supply far outweighing demand,” he said.
Buyers remain cautious, waiting for more economic stability. For the time being, any growth is expected to be modest as New Zealand continues to navigate its challenging housing market environment.