Property values in Aotearoa New Zealand rose by +0.3% in April, continuing the string of modest gains since the start of the year.
April’s rise on the Cotality hedonic Home Value Index (HVI) took values to $819,096, the highest since June last year ($822,175), but still down by about -16% from the January 2022 peak of $974,045.
Around the main centres, April was a stronger month for most, with Kirikiriroa Hamilton up by +0.8%, Ōtautahi Christchurch by +0.5%, and Tāmaki Makaurau Auckland rising +0.3%. Ōtepoti Dunedin, Te Whanganui-a-Tara Wellington, and Tauranga each saw a mild lift of +0.1% in April.
The hedonic methodology also allows for an analysis by property type, which shows the turning point is now evident for more segments too. Flats (townhouses) have risen by +0.9% nationally since January, standalone houses by +1.0%, and lifestyle properties by a more minor +0.2%.
Cotality NZ (formerly CoreLogic NZ) Chief Property Economist Kelvin Davidson said that the fourth consecutive rise in property values confirms the upturn is unfolding as expected, though a degree of caution remains warranted.
“Clearly, lower mortgage rates have been a strong support for property values in recent months, giving more buyers the confidence and ability to enter the market. Perhaps in a slightly perverse way, the recent global uncertainty about tariffs and trade protectionism could also see interest rates fall further.”
“That said, a fresh boom in property values seems unlikely. For a start, the stock of listings on the market remains high, giving buyers plenty of power when it comes to price negotiations.”
“Meanwhile, as interest rates for internal serviceability tests at the banks fall to less than 7%, the caps on debt-to-income ratios (DTIs) for mortgage lending are reportedly becoming a bigger consideration for more borrowers.”
“It’s also worth keeping in mind we had a ‘mini upturn’ in values over the second half of 2023 and first few months of 2024 which then partially reversed out again. This latest emerging phase of growth seems to have stronger fundamentals than the previous one, but even so, a subdued economic backdrop still looms as a restraint.”
CoreLogic Home Value Index
National and Main Centres
Tāmaki Makaurau Auckland
April was generally a month of increases for the various sub-markets across Tāmaki Makaurau, although there were some exceptions. Consistent increases of +0.3% to +0.4% were seen in North Shore, Rodney, Waitakere, Auckland City, and Franklin. Manukau was flat and Papakura edged down by -0.1%.
Clearer signs of growth are also evident across a broader three-month horizon, with North Shore, Franklin, Manukau, and Auckland City all up by at least +1.0% since January. Rodney is lagging a little, however, down by -0.6%.
Mr Davidson said, “In any part of the cycle there are different areas that either underperform or outperform, and with buyers still holding the bulk of negotiating power, it’s not all one-way traffic for property values in Auckland. However, the impact of lower mortgage rates does seem to be spreading across the super-city.”
Te Whanganui-a-Tara Wellington
Across the wider Te Whanganui-a-Tara Wellington area, Kapiti Coast stood out with a +1.4% rise in values in April, while Lower Hutt also recorded a reasonable gain of +0.4%. However, Upper Hutt only edged up by +0.1%, and Porirua and Wellington City itself were stable.
Kapiti Coast has also shown relative strength over a broader three-month period (+1.7% since January), with Lower Hutt also up by 1.1% in the quarter. Porirua and Upper Hutt have been a little more subdued since January.“
The large falls in property values around the Wellington area in recent years seem to have come to an end, and significantly improved affordability may be piquing the interest of more buyers. But as with many other parts of the country, available listings remain high, so buyers aren’t in a rush to compete or bid up prices sharply,” said Mr Davidson.
Regional results
The emerging upturn in property values can be seen across many of the key provincial markets. Whangarei, Rotorua, and Napier each rose by at least +0.5% in April, with Whanganui and Invercargill both at +0.4%. But Nelson dropped by -0.5%, Hastings was down by -0.6%, and Queenstown -1.0%.
“In the current environment where listings are higher than normal in many parts of the country and some sectors of the economy are yet to rebound, a bit of variability across the provinces is to be expected. But lower interest rates are a significant support, so the outlook for a modest recovery in values this year is likely to be replicated across regional markets too,” added Mr Davidson.
Property market outlook
Looking ahead, Mr Davidson noted that property values nationally remain on track for a rise of around 5% in 2025, a figure broadly consistent with the recent pace of growth (i.e. just short of 1% in the three months since January).
“That rate of increase looks relatively modest by past standards and given that we’re still about 16% below the record highs from early 2022. Some people may well be disappointed with such an outlook.”
“But it’s always worth noting there are two sides to the housing market coin, and any aspiring first home buyers, or investors, who are progressing towards saving a deposit will no doubt be pleased with a flatter patch for values.”
“Of course, there’s now quite a range of lending hurdles which also need to be negotiated, and it’s going to be fascinating to see how the impact of DTIs plays out over the next year or two”, he concluded.
CoreLogic New Zealand