The residential property market has continued its downward trajectory with the latest data showing the worst drop in values in more than 15 years.
Based on figures from January to November, values are now 10.2% lower, or $107,747 less in real dollar terms, than at the start of 2022. The average home value now sits at $945,568.
This is in stark contrast to 2021 when home values increased by nearly 30% nationally.
The current figures, reported in the latest QV House Price Index, are worse than those during the Global Financial Crisis. In 2008, home values fell by an average of 9% nationally during the same months, and 9.6% in total over the calendar year.
The latest index shows homes decreased in value by 2.9% nationally over the three months to the end of November this year, which was a slight improvement on the 3.9% quarterly reduction reported at the end of October.
QV chief operating officer David Nagel admitted it had been “a crazy couple of years in real estate” with massive growth followed by a significant correction.
“The last time we saw anything similar to this was after the GFC in 2008, but that was an entirely different kettle of fish to what we’re going through right now,” he said.
“For one thing, the market was behaving in a generally orderly fashion until that point, with gradual, sustainable growth, whereas the growth we saw during the first two years of the COVID-19 pandemic was far from gradual and sustainable.”
Of New Zealand’s main urban centres, the largest home value drops so far in 2022 have occurred in Wellington (-18.7%), Palmerston North (-14.5%), Hastings (-12.5%), Auckland (-12.2%), Napier (-12%), Dunedin (-11.5%), Hamilton (-11.3%) and Tauranga (-9.3%). At 5.4%, Queenstown is the only one still showing positive home value growth for the year, with Marlborough (-1.3%), New Plymouth (-2.2%) and Christchurch (-3.3%) the next most resilient.
However, Mr Nagel said the latest QV House Price Index was not all doom and gloom for homeowners, with its rolling three-monthly rate of reduction slowing nationally for the fourth month in a row.
Besides Hamilton (-4.4%) and Rotorua (-3.9%), all of the main urban centres showed less negative home value growth on average this month than last. Wellington (-5.2%) saw the largest average decrease this quarter, and Queenstown was once more the only centre to show positive home value growth, at just 1%.
Latest figures from the QV value map, January-November 2022:
Auckland
Home values have fallen by an average of 12.2%. The largest average declines this calendar year have occurred on the North Shore (-13.3%), in Auckland’s central suburbs (-12.8%), and Waitakere (-12.4%). Rodney (-7%) has experienced the smallest average decline. The region’s current average home value is $1.341 million, which is a 3% drop in three months.
Northland
Home values averaged a 3.4% fall in the Northland region. Residential property values fell by an average of 4.4% in the Kaipara District this quarter, with Whangarei and the Far North also experiencing declines of 1.9% and 1.5% respectively since August.
Tauranga
The average home value fell 3.2% to $1.064 million in the three months to the end of November, which is an improvement on the 5.8% decline recorded in the October quarter. With one month to go, the total decline this year to date is 9.3% on average.
Waikato
The Hamilton housing market’s downward spiral deepened this quarter, with values declining by an average of 4.4%. That figure is slightly worse than the quarterly decline of 3.9% reported last month. The city’s average house value is now $817,067, which is 10% lower than the same time last year, and 11.3% lower than at the start of this calendar year. Across the wider Waikato region, home values are down by an average of 6.9%. The biggest declines have occurred in Otorohanga (-8.7%), Waikato District (-7.6%), and Waipa (-6%). Only Waitomo has defied this downward trend, recording 2.7% home value growth since January 1, 2022.
Rotorua
Rotorua may stop just short of a double-digit average home value decline in 2022. The tourist town’s average house value has dropped 9% to $680,572. That includes an average decrease of 3.9% in the November quarter, a slight increase on the 3.6% quarterly decline last month.
Taranaki
Taranaki has been more resilient than most, with values falling an average of 2.2% in New Plymouth and 5% in South Taranaki. The Stratford District posted a small gain of 1.1%. In the most recent quarter, values fell across the region by an average of just 0.4%.
Hawke’s Bay
Regional values fell an average of 12.1%. The largest declines occurred in Hastings, falling 12.5% to $806,908, and Napier, which was down 12% to $787,019. This decline has eased somewhat, improving from a 5.3% drop in Napier and -6% in Hastings during the October quarter, to a -3.9% average in both this quarter.
Palmerston North
The average decline hit 14.5%, following 10 consecutive months of negative growth across the city. Values dropped 4.4% in the November quarter to $657,707. This represents a marginal improvement on the -5.5% reported for the October quarter.
Wellington
The downturn continues to deepen in Wellington, where average values declined by another 5.2% this quarter. This year is in stark contrast to 2021 when average values increased by 25.5% to $1.086 million. Now it’s down 18.7% to $883,897, with further declines expected. The biggest drops were in Hutt City (-22.6%) and Upper Hutt (-22.2%). This was also true of the most recent quarter, with values falling in these two districts by 7.1% and 7.8% respectively since the end of August.
Nelson
The city’s average home value of $807,497 was 8.9% lower than at the start of the year, and 1.1% lower than three months ago but an improvement on the 3.4% decline recorded over the previous three-month period.
West Coast
The West Coast continues to hold its own with month-to-month fluctuations due to lower-than-usual sales volumes. There was a 2.2% increase in average house values across the greater West Coast region in the November quarter, following a slight 0.8% decline in the October quarter. At 1.7% positive growth for the year, the West Coast remains the last region still showing net positive growth in 2022. Whether or not it will end the year on positive figures remains to be seen once December statistics are finalised. Average home values at the end of November were: Buller, $310,944; Grey District, $372,926 and Westland, $421,428.
Canterbury
The Canterbury housing market’s slow decline continues with values dropping an average of 1.1% this quarter, a slight improvement on the 1.7% average reduction throughout the October quarter. The region’s average annual growth rate is still sitting positive at 1.1%. Christchurch at -3.3% recorded the region’s biggest loss this year while others reported positive growth: Hurunui (2.8%), Waimakariri (3.3%), Ashburton (4.8%), and Timaru (4.9%). The Christchurch average value is now at $757,845.
Dunedin
Dunedin’s residential property market looks set to end the year with a whimper rather than a bang, with home values declining 1.3% in the November quarter. The city’s negative growth in 2022 stands in stark contrast to the 19.6% average growth it experienced throughout 2021. Values have dropped by an average of 11.5% in the 11 months to the end of November, down from $725,853 to $642,286.
Queenstown
The only main centre to show any positive growth this quarter, Queenstown recorded a relatively bullish 1% increase. It marks a small decline from the 2.9% growth reported for the three months ending October. Values are 5.4% higher on average than at the start of the year, up $87,836 to $1.708 million.
Invercargill
Values dropped 1.3% this quarter to $467,894. That figure is 3.9% lower or $18,821 less than at the start of 2022.