Property values in New Zealand have seen a modest increase of 3.33% year-on-year, pushing the average property value to $975,000. However, the latest data from the OneRoof-Valocity House Value Index also indicates a slight decline of 0.2% over the last three months, providing a more favorable landscape for first-home buyers. Regional variations exist, with Auckland, Bay of Plenty, and Gisborne experiencing a quarterly decrease in property values.
Interestingly, the country’s more affordable regions such as the West Coast and Southland have shown strong growth. Property values in these areas have seen notable increases of 4% and 3.4%, respectively. Christchurch and Dunedin have also recorded minor value rises, benefiting from their relatively lower average property values and higher availability of homes within the first-home buyer bracket.
Suburban areas like Tapanui, Hokitika, and Mangawhai have experienced significant quarterly value jumps, but the number of suburbs enjoying value growth has decreased since January. High new listing volumes mean buyers currently have more choice and better bargaining power. However, policy changes such as the scrapping of the first home grant scheme and the introduction of debt-to-income ratio rules from July 1 may pose challenges.
Despite these challenges, the loosening of LVR rules from July 1 is likely to benefit first-time buyers by allowing banks to offer more low-deposit lending. While the market remains tough, the higher interest rates may delay the next house price lift, potentially reducing competition. Investor activity appears to be on the rise, although the upcoming changes to the bright-line test might further influence this sector.