CoreLogic's updated, hedonic Home Value Index (HVI) showed a 0.5% fall in values across NZ in July - the fifth monthly fall in a row - taking the total decline from February's 'mini peak' to 2.5%.

The median value across all stock nationally now sits at $827,515, with the fall from February's figure ($848,713) equating to around $21,200. Values remain about 16% below the boom-time peak of $982,918 in January 2022, although they're still approximately 19% higher than the pre-COVID level.

Auckland

The renewed weakness in Auckland's property market has filtered to all of the key areas, with falls in values across the board in July; ranging from 0.4% in Rodney to 1.0% in Auckland City and Franklin.

Taking a three-month period since April, the drops have exceeded 3% in Waitakere, and are only a fraction less than that mark in Auckland City, Manukau, and Papakura. Franklin and Rodney have fared better, however they have also fallen since April.

Mr Davidson noted Auckland shares many of the same restraints as other parts of the country, including relatively high mortgage rates (for now) however it faces additional forces weighing down the market, including a higher starting point for values and stretched affordability.

"The townhouse construction boom in recent years has been centred on Auckland to a large extent, especially areas such as Waitakere and Manukau. This pipeline of new housing development isn't finished yet, meaning that overall listings levels and hence buyer choice could remain elevated in Auckland for a while yet. In turn, that will tend to keep a lid on property values."

Wellington

The Wellington area also showed broad weakness in July, with falls in values ranging from 0.2% in Upper Hutt down to 0.8% in Wellington City itself. On a three-month basis, the declines have been 2-3% almost everywhere, apart from a little more resilience in Upper Hutt (down only 0.5% since April).

Even after the recent up-and-down patterns in Wellington's market in the past 6-9 months, the bigger picture is still one of the most striking in the country; with values remaining 18-21% lower than the peaks of the post-COVID upswing.

"No doubt some savvy buyers will be eyeing up opportunities for property bargains around the wider Wellington area, given that values remain significantly below the previous peaks. That said, planned reductions in public service employment remain a compelling reason for caution about the Wellington market in coming months," Davidson noted.

Regional results

To some extent, 'provincial markets' showed more resilience than the main centres in July, with property values up by 0.6% in Whanganui, 0.7% in Queenstown, and by 1.0% in Invercargill. Gisborne and Nelson also edged up, with Palmerston North flat.

That said, there were other pockets of weaker results, with New Plymouth's property value dropping by 0.9% in July, and Whangarei and Napier declining by 1% apiece. Hastings dropped by 0.4%.

Mr Davidson noted, however, that regional variability is always a feature of the property market, whether wider conditions are strong or weak.

"Indeed, all parts of NZ are currently looking at elevated levels of listings, putting pricing power in favour buyers. I wouldn't read too much into any urban vs. regional divide in July's data. The bigger picture remains testing for the property market, regardless of location."

Property market outlook

Looking ahead, Mr Davidson suggested that listings data and mortgage rates will remain towards the top of the list of property market measures to watch most closely.

"Clearly, a medium-term drop in mortgage interest rates will help the finances of many homeowners, although it's of course less favourable for those with savings. Given we now have debt to income ratio limits in place, any interest rate driven boost to the housing market may well be smaller than it's been in the past," Mr Davidson noted.

"Meanwhile, the choice of property available to buy is already at a high level, and the shorter Brightline Test could yet push it up further. Indeed, any extra listings that come to market from investors who are now off the hook for any capital gains tax sooner than they originally anticipated would only add to stock levels. In turn, this would tend to keep a lid on house prices."

"Overall, the second half of 2024 could prove to remain challenging for the property market. But there's always two sides to the coin, and aspiring first home buyers will no doubt be pleased with that situation - plenty of choice and flat house prices are already helping this group to maintain a record high share of activity.

For more property news and insights, visit www.corelogic.co.nz/news-research.

ENDS

Source: CoreLogic