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House values down more than $100,000 this year

House values across the country fell further from January to November than they have in more than 15 years.

Tuesday, December 13th 2022, 12:21PM

by Sally Lindsay

The latest QV House Price Index shows values are now 10.2% lower, or $107,747 less in real dollar terms, than at the start of the year.

Homes dropped in value by 2.9% nationally over the three months to the end of November – a slight improvement on the 3.9% quarterly decline at the end of October – with the average value now sitting at $945,568.

The latest figures are a stark contrast to the same time last year, when the QV House Price Index showed values had climbed by an average of 25.5% from January to November last year.

In fact, the closest comparable year to this one is 2008, amidst the Global Financial Crisis (GFC), when home values fell by an average of 9% nationally from January to November, and 9.6% total during the calendar year.

QV chief operating officer David Nagel says it has been a crazy couple of years in real estate with massive growth followed by a pretty significant correction.

“The last time we saw anything similar to this was after the GFC in 2008, but that was an entirely different kettle of fish to what we’re going through right now. For one thing, the market was behaving in a generally orderly fashion until that point, with gradual, sustainable growth – whereas the growth during the first two years of the COVID-19 pandemic was far from gradual and sustainable.

“Home values increased by nearly 30% nationally last year. This year they’ve fallen by less than half that much on average, so there’s clearly still some way to go until they are back at pre-pandemic levels,” says Nagel.

“Fortunately, the economy hasn’t taken a hit like it did in 2008, so unemployment remains low – at least for now. Rising interest rates combined with an increase in the cost of living are going to continue to make life tough for many – especially the highly leveraged and those who bought at the peak of the market.”

Of New Zealand’s main urban centres, the largest home value drops so far this year have occurred in Wellington (-18.7%), Palmerston North (-14.5%), Hastings (-12.5%), Auckland (-12.2%), Napier (-12%), Dunedin (-11.5%), Hamilton (-11.3%) and Tauranga (-9.3%).

At 5.4%, Queenstown is the only centre still showing positive growth for the year, with Marlborough (-1.3%), New Plymouth (-2.2%) and Christchurch (-3.3%) the next most resilient.

However, Nagel says the latest QV House Price Index was not all doom and gloom for homeowners, with its rolling three-monthly rate of decline slowing nationally for the fourth month in a row. Besides Hamilton (-4.4%) and Rotorua (-3.9%), all of the main urban centres showed less negative home value growth on average this month than last.

Wellington (-5.2%) had the largest average decline this quarter, and Queenstown was once more the only centre to show positive home value growth, albeit at just 1%.

“The average rate of decline continues to slow in the lead-up to Christmas, despite the Reserve Bank’s bumper rise in the Official Cash Rate (OCR) last month. It has signalled further rises next year, and with talk of a recession being bandied about, homeowners and buyers can expect further downward pressure on prices well into next year before they might eventually see the market bottom out later in the year,” says Nagel.

Tags: QV

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 ▼7.65 ▼7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% ▼8.59 ▲8.49 ▲7.99 ▲7.59
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.29 6.59
SBS Bank Special - 7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 ▼7.84 7.35 ▼6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼7.24 6.75 ▼6.39
Median 8.64 7.19 7.27 6.65

Last updated: 27 May 2024 11:10am

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