CoreLogic's Home Value Index (HVI) showed that the property market remained weak in August, with values down by another 0.5%. That was the sixth consecutive fall since February's mini peak.
Moreover, following revisions to previous months data as the index captures more information (July now down -1.0%), this now takes the total fall since February to 3.7% nationally, or around $31,100 lower.
The median value across all stock now sits at $811,583, which remains about 17% above pre-COVID levels. But it's also about 17% lower than the January 2022 peak.
August's results are the second release to use the new hedonic methodology, which improves the timeliness and accuracy in measurement of changes to the residential real estate market. The increased weighting on recent sales evidence is clearly showing the re-emergence of soft housing market conditions across the country.
Indeed, apart from Christchurch (up by 0.2%), there were falls in values across each of the main centres in August, with Auckland dropping by another 1.0% (taking its fall since a peak in January to 6.0%) and Hamilton by 0.8%. The falls in Tauranga, Dunedin, and Wellington were more modest at less than half a percent over the month.
CoreLogic NZ Chief Property Economist, Kelvin Davidson said:
No doubt many households will be feeling happier now that the official cash rate is falling and mortgage rates are headed lower too. This sentiment effect, as well as the direct boost to borrowers finances, could support housing in the near term.
Yet the latest, actual fall in values is a timely reminder that the market still faces considerable challenges too. For a start, housing affordability is still stretched, while at the same time the labour market downturn is fully underway. Even if people haven't lost their jobs, the increased feelings of insecurity will still tend to flow through to less enthusiasm to trade property or pay top-dollar.
"It's also clear that the bargaining ' still only for the more limited pool of buyers who can actually secure the finance."
This all adds up to likely further restraint on property values in the coming months, although the potential impact of lower mortgage rates can't be ignored."
Index results for August 2024 National and Main Centres
| Month | Quarter | Annual | From post-COVID peak | From recent cyclical peak | From pre-COVID levels | Median value |
NZ | -0.5% | -2.2% | 0.7% | -16.8% | -3.7% | 17.2% | $811,583 |
Auckland | -1.0% | -3.3% | -1.4% | -21.8% | -6.0% | 9.0% | $1,070,494 |
Hamilton | -0.8% | -1.9% | 2.5% | -12.1% | -2.7% | 19.9% | $734,414 |
Tauranga | -0.4% | -2.1% | -0.2% | -17.2% | -4.2% | 20.9% | $910,449 |
Wellington | -0.1% | -2.1% | 2.7% | -21.5% | -3.7% | 9.7% | $826,976 |
Christchurch | 0.2% | -0.3% | 3.6% | -7.0% | -1.2% | 40.7% | $686,806 |
Dunedin | -0.2% | -1.7% | 3.8% | -11.5% | -2.3% | 10.2% | $604,324 |
Auckland
Each of Auckland's sub-markets registered a fall in property values in August, ranging from 0.5-0.9% in Franklin, Waitakere, Manukau, Rodney, and North Shore, down to more notable weakness in Auckland City (-1.4%) and Papakura (-1.7%).
That said, compared to a year ago, Auckland City has held up a little better than elsewhere, only down by 0.6%, versus falls of around 2% or more in Manukau, Waitakere, Rodney, and Papakura.
Putting aside these variations from area to area, however, Mr Davidson noted that the bigger picture for Auckland's housing market is one of generally renewed weakness.
"Each part of Auckland has dropped by 3% or more since the latest mini-peak for values, and although mortgage rates are now falling, affordability challenges still persist. Meanwhile, an elevated stock of listings gives buyers the pricing power, and the continued flow of new-builds hitting the market only adds to those effects."
| Month | Quarter | Annual | From post-COVID peak | From recent cyclical peak | From pre-COVID levels | Median value |
Rodney | -0.8% | -4.5% | -2.1% | -20.7% | -5.9% | |