Long road until house values near pre-pandemic levels

BY SALLY LINDSAY

The latest QV House Price Index (HPI) shows home values are still on average 24.5% higher nationally than they were when the pandemic first began three years ago.

That's despite a 12.6% average drop in the last 12 months, and a 2.7% average decline this quarter.

QV national spokesman Simon Petersen says if residential property values continue to fall at their current rate, it could still take up to two years to hit their pre-pandemic level nationally.

“That’s a pretty big ‘if’, with the market expected to stabilise before then.”

The latest HPI figures show the average home value has fallen across the

Auckland market hobbled by February’s extreme weather

Auckland’s property sales in February slumped to their lowest for at least a quarter of a century.

Barfoot & Thompson, the biggest residential agency in the city, sold just 410 properties, down 45% on the same time last year.

The only month in the past 20 years when the agency sold less was in April 2020, when virtually all commercial activity was suppressed as a result of Covid.

However, new listings at 1,309 for February were 21.5% higher than in February last year. At month’s end the agency had 4,873 properties on its books, the highest number in a February for 10 years.

The median price of the homes sold was $1,023,000, up 2.3% on January’s median price and down 8.9% on that for February 2022.

The average price at $1,101,980 was down 1.2% on that for January and down 7.9% compared to February last year.

A feature of February’s trading was that fewer than 6% of the homes sold were for more than $2 million. At this time of the year that number has regularly been about 10%.

In February, nearly a quarter of the houses sold were in the under-$750,000 price bracket.

Wellington’s affordability exits the doldrums

Housing affordability in Wellington is now the best of the country’s main centres.

CoreLogic’s House Price Index shows prices in Wellington have fallen 20% in the past year - the biggest drop in the country.

The dramatic fall is making the city affordable once again for house buyers, after being out of the reach of many for a couple of years.

Across the country, home values fell 1% in February - the biggest monthly drop since October last year, when they declined 1.3%. Home values are now 8.9% below February last year.

Christchurch’s average property value edged higher in February by 0.4 per cent, wider Wellington region by 21% since February last year to reach $854,092 at the end of February this year – a figure that is still $109,609 or 14.7% higher than when the pandemic began.

Home values remain more than $100,000 higher in the region than they were three years ago.

In Christchurch and Auckland, the pre-pandemic difference in dollar terms is still upwards of $200,000.

Meanwhile, the largest drops in home value across the main urban centres in the three months to the end of February were in Rotorua (-5.5%), Auckland (-4%), and Palmerston North (-3.9%). ✚ and is only 1.7 per cent lower than the same time last year.

Slow but steady decline in building consents

New dwellings consented in January dropped by 86 to reach 2,777, down by 2% compared to January last year, Stats NZ figures show.

It was the fourth consecutive month the number of homes consented has been below the same month a year earlier.

Although the number of dwellings consented in January was down, the estimated build costs were up 2.%.

The downturn in January’s new consents compared to a year ago was particularly significant in several areas with Auckland down 11.5%, Waikato down 17.8%, Bay of Plenty down 14.8%, Tasman down 7.4% and Nelson down 20%.

The number of stand-alone houses consented in January was down 25.6% compared to a year earlier, while the number of multi-unit homes consented was up 22% over the same period. ✚