2024 House Prices Drop: Key Statistics and Trends
New Zealand’s property market has been facing a downward trend, with the median house value dropping by $32,200 in the year to December, according to Corelogic. This decline marks the ninth drop in the past 10 months, with property values falling by 0.2 percent in December alone. The data reveals a 3.9 percent decrease compared to the previous year and a significant 17.6 percent drop from the post-Covid peak. Despite these decreases, values remain notably higher, standing at 16.2 percent above the levels recorded in March 2020.
Regional Variances
In December, some regions experienced contrasting movements in property prices. Hamilton saw a rise of 1 percent, while Tauranga and Dunedin witnessed increases of 0.4 percent and 0.3 percent, respectively. On the other hand, Auckland and Wellington faced declines of 0.4 percent and 0.7 percent, respectively. Corelogic’s chief property economist, Kelvin Davidson, attributed the softening prices in Auckland to the high number of properties for sale, including existing listings and new builds entering the market.
Market Factors
Davidson highlighted that housing affordability in Wellington had improved after several years of significant value drops. He pointed out that recent declines could be linked to public sector cutbacks affecting economic and housing market sentiment in the region. The overall market performance was impacted by higher mortgage rates, weakness in the labor market, and growing job insecurity.
Future Outlook
Despite the current market conditions, Davidson suggested that the rate of decline might be slowing, hinting at a possible stabilization in the near future. The influence of lower mortgage rates, particularly due to reduced serviceability test rates at banks, could provide some support to property values. However, uncertainties remain, with conflicting forces such as economic sluggishness and credit restrictions posing challenges for the market in 2025.
Provincial Market Trends
Smaller centers showed more resilience in December, with some areas experiencing upticks in house prices. Davidson noted that lower mortgage rates might be starting to impact property values positively in certain parts of provincial New Zealand. He anticipated a modest recovery of around 5 percent in property values across the country in the upcoming year, emphasizing the potential impact of debt-to-income ratio rules on the mortgage market.
In summary, while the property market faces ongoing challenges, signs of stabilization and subtle improvements in certain regions indicate a complex landscape ahead for buyers and sellers alike. Stay informed with Ngā Pitopito Kōrero, our daily newsletter delivering curated news straight to your inbox every weekday.