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New Zealand Property Values Decline in October, But Floor May Be Approaching
In October 2024, New Zealand property values dropped again, with CoreLogic’s Home Value Index reporting a -0.5% decline. This marks the eighth consecutive monthly decrease, with a cumulative -5.1% drop since February. Wellington led declines among major centers, falling by -1.2%, while Christchurch showed a modest gain of 0.2%. Auckland and Hamilton saw respective drops of -0.7%.
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Chief economist Kelvin Davidson suggests that this could indicate a nearing floor for property values, attributing the downturn to job insecurity and recent mortgage rate drops. He also notes a recent market sentiment shift across sectors, with indications of a potential property value stabilization as interest in the market grows. Despite falling values, supply remains high, with a 26.3% year-on-year increase in stock levels across New Zealand, per realestate.co.nz.
In Auckland, value drops are most significant in Manukau (-0.9%) and Auckland City (-0.8%). Wellington remains under pressure, with Kapiti Coast and Wellington proper seeing declines over -1%. Across the regions, property performance varies, with some areas like Rotorua and Nelson experiencing slight gains, while Whangārei and Invercargill face small declines.
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Davidson anticipates that while a rebound is possible within 6 to 18 months, a boom similar to the post-COVID surge appears unlikely due to persistent affordability and labor market challenges. Debt-to-income limits and housing affordability concerns will likely temper future gains, indicating a slow recovery pace ahead for New Zealand’s property market.