Quotable Value expects there to be a "slow recovery" in the housing market next year.
The average value of New Zealand homes was $914,017 at the end of November, down 3.3% from where it was at the start of the year. However, that's up 2.3% over the three months to the end of November. (See the table below for the regional values).
Only three of the 16 main urban centres had higher average values at the end of November than they did at the start of the year - Rotorua +3.2%, Queenstown +2.1% and Invercargill +1.5%.
The centres with the biggest declines in average values since the start of the year were Whangarei -7.4% and Tauranga -6.3%.
"The residential property market has been a rollercoaster ride since Covid-19 first reared its ugly head on these shores, with more ups and downs than the entire decade prior," QV operations manager James Wilson said.
"This year, home values continued to fall for the most part, stabilised, and now appear to be slowly strengthening again.
"But rather than the start of another major uplift in values, I expect we'll see a return to a more typical sort of housing market in the year ahead, with slow growth, and days to sell and listing numbers eventually returning to historic norms.
"High interest rates currently have a stranglehold on the market and the economy as a whole, which won't alleviate any time soon judging by the Reserve Bank's most recent announcement.
"This is going to continue to put a damper on things next year, as it's been designed to do," Wilson said.
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63 Comments
Whats pushing the prices in Rotorua... some old geezer (geyser) I suppose
Ever tried to get a consent through Rotorua Lakes Council that wasn't for KO?
Good Rotorua developers build houses in Hamilton and Auckland now.
Yes I know of one who had a major head ache trying to do a three dwelling development and she vowed and declared never again. Most to do with geothermal land wether it was or not. And the engineers hers against council it wasn't cheep
Nope and it sounds like its not worth trying. Mayor Tania Tapsell (from memory) stood for the gnats didnt she (?) and should be growth focussed.
Don't think we have seen the bottom yet.
The reality of no laundered money no printed money and high interest rates will be very grim for NZ next year.
On top of that a very average government that has us in recession already with poor leadership and know vision I only see average to below going forward.
Maybe we can find normal again in this crazy world.
"a very average government that has us in recession already"
Are you blaming the recession on the new government?
The upcoming one(s), yes
I would put a lot of blame on National from their last 3 terms in parliament, which has resulted in a lot of the problems we see today. eg under investment in infrastructure, and not bringing in things like a CGT to better balance the tax system etc
John Key was the king of Laundered money.
The down fall of this country started after the GFC.
Not saying the last lot was any better with their printed money.
Time to take the medicine NZ.
This won't be fun.
Much like a child now aged 52 still blaming their parents that life did not turn out well
Haha ‘blackandwhite’ you’ve just lost all credibility, forever!!
Yes Matt
Most people don't like the truth these days
😂
I dont think we will ever find "normal". 2024 will be a train wreck, eventually the RBNZ will cave and slash rates. Minions will pour into property and 'feel' wealthy. Young NZ'ers will continue to leave NZ to chase the lifestyle they will never be able to afford here, a lifestyle many of us enjoyed here in a different NZ, simply because we were born at the 'right' time.
Rinse and repeat is our normal.
Nothing to see here, next year will be totally honky dory.
Business as usual people, stay calm and keep buying!
Hi Thats All Folks,
I expect you're trying to be cynical with your comment above....
But, ironically, the comment might well turn out to be pretty accurate. Anyway, time will tell.
Best wishes to all for a relaxing festive season.
TTP
From memory, after the GFC house prices fell 25% but were then flat for 3 years. It wouldn't surprise me if we see a similar pattern now.
Locality dependent as I recall. The regions did not recover until 2015 while aucklnd was 2012, chch waited until 2020
Baptist, after the GFC, NZ house prices fell 10.5%.
Thanks. I was twenty when it happened so can't recall the exact pattern
Unlike the GFC we have had a ton on money printed. That’s the great unknown.
Nominal or real? From memory that decline took about 3 years? So possibly 15% real?
The only way I can see house prices rising significantly (>5% per year) is if interest rates drop back down (i.e. 2yr fixed between 5-6%). But that all depends on why interest rates are dropping. Is it a "soft landing" or the economy going down the toilet and unemployment shooting up?
give it 6 months
I wonder how the projected massive council rates increases will impact prices. A few years of 10% plus rate rises and they'll have doubled before the decade is out. While TOP didn't get in with it's land tax, by the time you're paying close to 10k pa for rates on a modest home it'll sure feel like a land tax.
Well, I guess someone has to pay those 6 figure councillor salaries.
The greedy buggers should all take a pay cut. At least have the management of council accounts external. You can’t have them voting themselves pay rises every year. Also cut the staff quota in half.
Plus we have 67 water authorities to pay for, each with their own management structure, vehicle fleet etc. In Hawkes Bay (a population of 180k) there are 5 alone:
- Central Hawkes Bay District Council
- Hawkes Bay Regional Council
- Napier City Council
- Hastings District Council
- Wairoa District Council
Yip, I hear you. NZ population is the same as a small US city, and they manage with a council staff count of 1% of what we have. NZ councils are all about self entitlement, intentional bureaucracy, intentional inefficiencies. Pigs drinking from the trough.
I couldn't let this comment stand unchallenged - councillors aren't paid very much, In Auckland only, a councillor's minimum salary is $107k - a senior policy analyst in central government gets about that. In Christchurch this minimum is $64k. A graduate policy analyst in central government gets paid that.
Except for the Chatham Islands, the lowest councillor remuneration is currently now pegged to a half time equivalent of about two thirds of the average wage. In the case of the smallest councils this breaches our governance remuneration pool approach and means that the resultant governance pool needs to be increased to reflect the current number of councillors, rather than the ranking of the council on the size index.
And what about the median and maximum salaries?
Kauri you raise a very good point. And that is the great unknown I feel.
The price of success in our rockstar economy !!
It amazes me, how many people think that LVT wont affect rents. With the average gross yield at 3%, landlords will on charge 100% of the LVT/rate rise to the tenant in less than 12 months. There is no margin to absorb it. An LVT is a tax on everybody for having the audacity of not living in a caravan.
by kiwikidsnz | 18th Dec 23, 5:45pm
Roughly 75% of NZ rentals are provided by private landlords.
Rents are well demonstrated to be set by peoples ability to pay, not by landlords capital, interest, maintenance or other costs in providing the accommodation. Therefore for everyones long run benefit policy efforts would be more effectively directed to raising average income level rather than subsidising tenants (accommodation supplement) & inefficient uncompetitive employers (WFF).
"This is going to continue to put a damper on things next year, as it's been designed to do," yup, it will... there are many out there struggling to meet repayments
according to statistics, 1/3 households are having mortgage. 1/3 are paying rent. 1/3 don't are freehold.
maybe some people are finding it hard, but many more are coping just fine.
House inflation is back baby.
It's so good
What about those just entering the housing market. Young families who have struggled to grow a deposit for their first home. If there is house price inflation next year I hope it is minuscule. Why do people just think about themselves?
Sorry. Should have put a sarc. in there.
I absolutely abhor house price inflation and have zero respect for the fact that a physically depreciating asset can appreciate in value, it makes no long term economic sense for the country. And I particularly abhor the language used in media that gloss's over the fact that it is inflation and it does have HUGE negative impacts both micro and macro.
TBF you probably are correct I probably am thinking about myself as I currently don't own property.
That's our Kiwi extraordinary popular delusion for you. A key necessity of life (shelter) becoming more expensive and unaffordable for many is somehow a good thing? Because of the magic & mysteriousness of the "wealth effect".
If it's so easy and the road to riches, why aren't you doing it?
It was easy its hard now. How hard to buy a house and have a ready made market, where all you do is sit in a house and the price goes up.
A proper business you have to test the market, build a brand, start breaking even, keep building the brand, stay on top of your costs, constantly adjusting your margins while trying to make a profit. Building a brand is so hard.
Buy a couple of houses then and get rich...as you say. What's stopping you?
Maybe he's(?) able to see the likely poor future returns in housing?
It's a crowded trade. One for the unimaginative willing to put up with mediocre returns, at best.
I've made a fortune out of property, but it's risky. There's always financial 'experts' here telling us how easy it is to make money on property....if it's that easy...have a go!!!!
I had a lot of debt many years ago when interest rates shot up to 22%...think how much fun that was.
You've made a fortune through a raging long term cyclical bull market in property - interest rates falling, prices rising, poor policies on housing supply. Right place, right time.
To think the future returns will look like the past you have to think interest rates are going to go seriously negative and politicians will remain just as useless on housing supply. I'll admit the latter is a reasonable bet, at least.
For full disclosure, I own my home and have owned a rental property which I have now sold. My share portfolio has done far better than my property (although some of it is in REITs which look like enormously better value than buying a rental property right now)
Wingman, many think when others get rich, it's because it was easy, they were "born at the right time" but if you suggest they could give it a go, then they think it's suddenly become a lot harder!
Correct!
I took a huge punt on West Harbour in Auck when there was nothing there. When I was building my second house, a guy walked up to me and said..."nothing will ever happen out here".
"a guy walked up to me and said..."nothing will ever happen out here".
That is the same guy who tells you today: "you got lucky"
Not if you do it right - find out where development's going to occur, where the roads are going to be upgraded, where new shops, retirement villages are likely to be built, where the big developers have been sniffing around, access to highways and shopping centres etc.
We've lived through the biggest windfall in human history by discovering cheap and readily available fossil fuel, in particular oil.
There is no skill in it, it's been a fluke and we've burnt through the jackpot. The money you've earnt isn't tethered to it's real value (energy) and will come unstuck soon.
When you ask? Next year? Unlikely. Next decade? Definitely.
Made a $400k CG after 4 years of living in our 1st home bought in 2017 (after deducting $50k deposit and $150k initial mortgage). It was so easy.
But because I'm a sucker, I chose to recycle that gain into a forever family home on a 1/4 acre section, close to schools, town and commuter transport. For some reason though, the bank/valocity is saying we're down about $100k on 2021 purchase price.
Do you know when we'll get rich again and make our next $400k?
It is good that houses are going up in price because loads of wealthy people have invested in them, and they are becoming more wealthy. Increasing inequality and effectively trapping people in rental houses. Who cares if regular people can afford their own home? I am sure some doom and gloom merchants might, but not the mainstream economists and commentators, that is for sure.
Well done to all those that bought earlier this year.....the bottom's in.
Taken on its own, 2.3% over 3 months is annualised growth of 9.2%, which in a decade elsewhere in the world would be considered obscene and bubble territory.
"Prices doubling in 8 years! Everybody into the pool!"
Love it how some people have taken to putting lipstick on the pig.....lol
Houses where I am now selling only 1% below the RV. Homes has the price UP for another month but one roof slightly down, the two numbers set to merge.
whereabouts are you based Zwifter?
Hopefully where nobody on here can find me.
lol. Fair enough.
A place called Bunkersville.
"Hopefully where nobody on here can find me"
Why? What are you afraid of?
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