Are we seeing the story of a “tale of two cities” and even a “tale of two islands” playing out in our market as buyers continue to enjoy favourable conditions while many agents now talk optimistically about “green shoots” of value growth?
The latest data from the OneRoof-Valocity housing report shows the South Island performing more strongly than the North. And its largest city, Christchurch, is just $4000 below its post-Covid peak while Auckland experiences flat conditions.
Christchurch now has an average value of $802,000 while recoveries for Auckland and the capital, Wellington, are predicted to be several years away.
Auckland is certainly suffering from the global phenomenon of seeing average values rise well above $1m during the pandemic and then suffering disproportionately when interest rates increased to battle post-Covid inflation.
For Wellington, analysts say the general market mood, coupled with cuts in public service jobs, could mean the capital may not see prices return to previous record levels for another five years.
OneRoof’s June report says national values increased 0.3% in May. The average value for a property was $969,000, a slight dip of 0.5% on the corresponding period last year.
The result might have been worse if it were not for the strength of the South Island market. Canterbury’s average property value rose 1.1% to $797,000, almost matching its post-Covid peak.
Otago and Queenstown-Lakes have fully recovered from the slump, experiencing around 2% value growth in the three months to June.
Queenstown-Lakes hit a new record high of $2.099 million in May.
West Coast and Southland also reached new highs.
Conversely, growth in much of the North Island has been minimal or negative. Auckland’s average property value dropped 0.2%, while Tauranga and Wellington’s slid 0.7%.