QV’s House Price Index shows values dropped nationally by an average of 1.9 per cent throughout the three months to the end of July – a bigger decline than the 0.9 per cent in June.

The average home is now worth $909,517, which is 2.3 per cent more than the same time last year and just 0.5 per cent higher than at the start of this year.

The biggest average drops were across the top of the North Island – in Whangarei (-3.9 per cent) and Auckland (-3.4 per cent). The latter has now recorded six consecutive months of negative growth, with the average home now worth 0.4 per cent less than at the same time last year. It has dropped about $9,000 a month from January to July.

Among the other largest cities, average values have also declined for four straight months in Wellington and now in back-to-back months in Christchurch.

Just Marlborough (0.6 per cent), Invercargill (0.4 per cent), and Queenstown (0.3 per cent) recorded modest growth. Of these three, only the latter recorded slightly higher quarterly growth in the three months than in the previous period.

QV operations manager James Wilson says property values are slowly shrinking across all price brackets, in almost every part of the country.

“This is to be expected given the challenging economic conditions, with a rising sense of job insecurity and persistently high interest rates leaving both buyers and sellers between a rock and a hard place,” he says.

“We’re also seeing a major imbalance between the number of properties available for sale on the market this winter and a shallow pool of buyers who are willing and able to make a purchase.

“This is helping to maintain downward pressure on prices overall, with sellers having to adjust their expectations, pull their listings, or play the waiting game until conditions eventually improve.”

However, Wilson says there was a growing optimism that mortgage rate relief could be on the not-too-distant horizon.

Prospective buyers will also be paying close attention to what the Reserve Bank has to say this week, with two more monetary reviews scheduled for October and November.

“Markets don’t tend to respond too well to uncertainty. So, when we do eventually get a firmer steer on when we can expect mortgage rate relief, it may signal a shift in sentiment, which could spark some life in certain parts of the property market – but it’s not expected to trigger a rush back to the races.”

In the meantime, he expects home values to remain flat to gently falling. “Unemployment is on the rise, and we may see an uptick in mortgagee sales as a result of economic strife, but it’s still unlikely that we’ll see any strong value declines as we make our way through the rest of winter. It’s even less likely that we’ll see any sudden strong home value growth,” he says.

Northland

Home values have diminished across the Northland region at an average rate of 2.9 per cent this quarter. The biggest average drop was in Whangarei, where the average home value declined 3.9 per cent this quarter to $716,214. Kaipara had the smallest average decline – down 0.7 per cent to $850,253 – and the Far North was between the two, with a 2.1 per cent quarterly reduction to $708,968.

On an annualised basis, home values in the Far North remain 9.5 per cent higher on average than at the same time last year. They are also 6.5 per cent higher on average in Kaipara and 1.5 per cent lower in Whangarei over the 12 months to the end of July.

Auckland

The average Auckland home is now worth 0.4 per cent less than a year ago, following six consecutive months of negative growth.

The average house was almost $53,000 lower at the end of July than it was at the end of January, declining at an average rate of almost $9,000 a month.

The latest index shows the average home value across the city has dropped 3.4 per cent to $1,238,413 in the July quarter – a higher rate of quarterly decline than the 2.6 per cent decline in the previous index.

Of the Super City’s seven former local government areas, the largest average home value reductions occurred this quarter in Papakura (-5.7 per cent). Otherwise, the rate of decline was relatively consistent across Franklin (-3.1 per cent), Manukau (-3.3 per cent), Auckland City (-3.1 per cent), Waitakere (-2.6 per cent), North Shore (-2.2 per cent), and Rodney (-2.7 per cent).

The market remains subdued overall, with agents reporting little interest from buyers – apart from the occasional “cheeky” offer.

Tauranga

The residential property market’s slow but steady decline has continued in Tauranga.

The index shows the city’s average home value reduced by one per cent to $1,019,271 – up slightly from a three-month average rolling rate of 1.3 per cent negative growth in the previous index. The city’s average home value is now 1.6 per cent lower than at the start of this calendar year, but still 2.5 per cent higher than at the end of July last year.

Waikato

The average home in the Waikato region has decreased in value by 1.2 per cent this quarter.

Just two districts across the wider Waikato region managed to buck this trend – Taupo (1.5 per cent) and Hauraki District (1.1 per cent). Otherwise, Otorohanga (-4.3 per cent), South Waikato (-3.5 per cent), Waikato District (3.1 per cent), and Matamata-Piako (-2.3 per cent) had the largest declines on average.

In Hamilton, the average home value decreased 1.4 per cent to $778,699, which is a higher rate of reduction than the 0.3 per cent quarterly decline in last month’s index. On an annualised basis, that figure remains just 0.2 per cent higher than at the same time last year.

Local QV property consultant Marshall Wu says real estate agents indicate the total amount of stock available for sale remains significantly high, with lower asking prices. “Many sellers are becoming more cautious and are seeking well-known agencies to list their properties in an effort to achieve higher sale prices.”

Taranaki

The downturn remains relatively steady in Taranaki.

Across the wider region, the average home has reduced in value by 1.4 per cent this quarter – just 0.2 per cent off the quarterly rate of decline in last month’s index.

In New Plymouth, the average home value has reduced 0.9 per cent to $713,748 this quarter – its rolling three-monthly rate of quarterly decline increasing by just a fraction of a percentage point from June to July – with an average annual rate of decline of 0.5 per cent.

South Taranaki recorded the largest average home value drop this quarter at 3.1 per cent, with Stratford not far behind on 2.9 per cent. However, these two districts are still showing a small amount of positive home value growth on an annualised basis of 1.8 per cent and 0.2 per cent respectively.

Hawke’s Bay

Residential property values continue to ebb away at a slow but steady rate in Napier and Hastings.

The average value reduced 1.8 per cent to $745,451 in this quarter. However, Napier (1.5 per cent) and Hastings (3.1 per cent) are still showing positive growth on an annualised basis.

Palmerston North

Residential property values have reduced for a fourth straight month in Palmerston North.

The city’s average home value dropped 1.4 per cent to $635,185 this quarter – just a fraction of a percentage point worse than the three-month rolling rate recorded in the previous index. The average home is still worth 1.5 per cent more than at the same time last year.

Local QV registered valuer Olivia Betts says affordability concerns remain, with many potential buyers facing challenges due to higher interest rates. “These rates are continuing to pose difficulties for those looking to enter or move within the market.”

Wellington

The average home in Wellington is now worth 0.2 per cent less than at the start of this calendar year.

It follows four straight months of slow but steady negative home value growth, including by an average of one per cent in July. The mean average home value in the region is now $856,946, which is 1.9 per cent lower for the quarter but still four per cent higher than the same time last year.

Declines were recorded on average across every district this quarter, with Hutt City (-2.5 per cent) recording the largest, and Upper Hutt (-0.8 per cent) recording the smallest. The latter and Kapiti Coast are the only districts still showing positive growth on average throughout the first seven months of 2024.

“The property market remains sluggish in the Wellington region, with values continuing to slide over the month of July,” says David Cornford, QV senior consultant. “Stock levels have dropped slightly over the past month – but there is still a large amount of unsold stock on the market, giving buyers plenty of choice and bargaining power.”

Cornford says while interest rates are expected to start declining by the end of the year, it’s unlikely to have a significant impact on the market initially, given weak economic and employment conditions.

“In the meantime, buyers continue to take a cautious approach, and the majority of households are reluctant to take on additional debt given current uncertain economic and employment conditions.”

Nelson

Home values have dwindled across the greater Tasman region by an average 0.3 per cent this quarter.

But the reductions have been larger on average in Nelson. The city’s average home value reduced 1.4 per cent to $769,979 – a slightly higher rate of decline than the 0.9 per cent deficit to the end of June.

Marlborough bucked the downward trend this quarter. Its average home value increased 0.6 per cent to $714,898, making it one of just three main centres across the country to post positive growth throughout the three months to the end of July.

QV Nelson/Marlborough manager Craig Russell described the local market as “soft”, with high levels of inventory – especially in the Tasman District.

“There are indications that a number of investors are leaving the market now due to low returns. These are predominantly the older demographic, who are wanting to cash out now, given the likelihood of an extended period before there is any considerable value growth,” he says.

“First-home buyers remain active in the local market and the average number of days to sell remains high, with the cost of borrowing remaining a big barrier for purchasers to overcome. Mortgage borrowing is at low levels, which indicates that people are not borrowing due to the costs.”

West Coast

Residential property values yo-yoed across the West Coast in July.

They dropped 2.2 per cent to $414,372 in Grey District, increased by an average of 0.8 per cent to $360,297 in Buller, and also dropped 0.6 per cent to $438,339 in Westland.

On an annual basis, however, residential property values are 7.4 per cent higher across the wider West Coast region than they were at the same time last year. This is compared to a national average increase of 2.3 per cent annually.

Canterbury

Residential property values have softened across much of Canterbury.

Only Ashburton recorded positive home value growth this quarter. Its average home value increased 5.3 per cent to $576,762.

Otherwise, home values dropped across the wider region at an average rate of 0.7 per cent throughout the quarter – a nominal decline after the 0.3 per cent growth in the June quarter.

In Christchurch, the average home value declined 0.7 per cent to $760,981 this quarter. The surrounding districts of Waimakariri (-0.5 per cent) and Selwyn (-1.4 per cent) also recorded modest declines.

QV senior consultant Olivia Brownie says the first-home buyer market in Christchurch is consistently resilient, with the lower quartile making up more transactions than the owner/occupier upper quartile market.

Otago

The housing market has remained largely flat across the Otago region.

The average home value dropped across the wider region by 0.1 per cent in the quarter. Clutha District experienced the most growth on average at 2.3 per cent, and Dunedin experienced the largest average decline at 1.5 per cent.

On an annualised basis, the average home value in the district of Waitaki is 7.2 per cent higher than the same time last year at $498,955, which is the biggest average annual growth in the Otago region. In comparison, the average value of a home in Dunedin is 4.4 per cent higher than the same time last year at $637,119.

“The strongest growth over the last 12 months continues to be in Dunedin North at 6.6 per cent, followed by the Taieri at 5.5 per cent.”

QV registered valuer Rebecca Johnston says the lower quartile has seen a slight strengthening in the latest figures, while the upper quartile reversed with a slight weakening.

Queenstown

Queenstown was one of three main urban areas to record home value growth this quarter.

The average home value in Queenstown increased 0.3 per cent to $1,832,346, which is a slightly faster rate of growth than the 0.1 per cent quarterly home value increase in the June index. The average home value is now 6.9 per cent higher than at the end of July last year, and 3.1 per cent higher than at the start of the year.

Invercargill

QV recorded only modest home value growth in Invercargill this quarter.

The city’s average home value has increased 0.4 per cent to $483,715. That figure is 5.4 per cent higher than at the same time last year, and 1.3 per cent more than at the start of this calendar year.

QV registered valuer Andrew Ronald says market conditions remained flat across all price brackets. “High interest rates are continuing to limit growth, but we are still seeing relatively steady demand from first-home buyers, with investors starting to slowly return to the market again following the restoration of interest tax deductibility rules.”