New Zealand Home Values Continue to Rise, but at Slowing Pace, warns CoreLogic

Date Published: 1 March 2024

Key Facts

• The average value of New Zealand homes increased to $930,495 at the end of February, up from $928,184 in January and $924,489 in December 2023.
• The rate of value growth is slowing, demonstrated by a growth of only 0.3% in February, down from a 1.6% growth three months earlier.
• The housing market was soft in January and this trend continued in February.
• Buyers and sellers are still taking their time, creating more subdued value growth.
• New market entrants face challenges saving deposits and satisfying loan serviceability criteria, due to high mortgages and property sales volumes at near record lows.
• The risk of further rises in the short term hasn’t dissipated, meaning one and two year fixed mortgage rates may stay high.

Article Summary

The average value of New Zealand homes continued to rise, reaching $930,495 at the end of February. This indicates an increase from $928,184 in January and $924,489 in December 2023. However, CoreLogic reveals that rate of value growth is slowing down, with February’s rate of 0.3% significantly below the three months earlier figure of 1.6%.

The property market, according to CoreLogic, showed softness in January, and this trend continued into February. According to CoreLogic NZ Chief Property Economist Kelvin Davidson, despite high mortgage rates and near-record low property sales volumes, buyers and sellers are not rushing into transactions. This results in slower value growth. Davidson also points out that even existing homeowners looking to move up are being cautious and taking the time to assess their financial situation.

New entrants in the housing market have been particularly hard-hit, struggling with challenges such as amassing sufficient deposit and proving loan serviceability, due to the high cost of mortgages. Investors are not spared, grappling with high mortgage rates. Davidson cautioned that the possibility of further increase in rates is not completely eliminated. Consequently, short-term fixed rates like one and two years loans may remain high for some time.

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