Property values in New Zealand grew 0.3% last month, according to CoreLogic, with further modest growth expected in 2025.
The latest data comes from CoreLogic’s Home Value Index, with chief property economist Kelvin Davidson saying it is a further sign last year’s “mini downturn” has come to an end.
Values declined cumulatively by 4.1% between March and September last year, followed by “modest movements” from October to January.
“This month’s result marks the strongest rise since a 0.5% gain back in January last year,” CoreLogic said.
The median national value was $807,164, down 16.9% from previous highs in 2021 and early 2022 but 17.7% above the pre-Covid figure of $689,353 in March 2020.
In the main centres, February saw a -0.2% drop in Tauranga, a 0.6% rise in Christchurch and Dunedin, 0.5% in Hamilton, a 0.3% rise in Auckland, and 0.1% in Wellington.
Davidson said the increase had been expected “given earlier signs about a return to growth”.
“The rise of 0.3% in the national median property value is fairly modest by past standards but nevertheless represents the first meaningful increase for more than a year,” he said.
“It was always likely that the property value falls in 2024 would come to an end at some stage in early 2025, given the extent of interest rate cuts since July or August last year.”
The regions outside the main centres were “a little patchy” in February.
Napier and Nelson were up 0.4%, Rotorua was up 0.1%, Gisborne was up 0.5%, New Plymouth was up 0.3%, Invercargill was up 0.9%, and Queenstown was up 0.8%.
Palmerston North (down -0.1%), Hastings (down -0.4%), Whangārei (down -0.2%), and Whanganui (down -0.6%) saw drops.
CoreLogic said the mixed results for the regions were “a reminder that even though the general trend now seems to have turned, not everything will move at the same speed or direction from month to month”.
Davidson said: “In the current environment where listings are higher than normal in many parts of the country, this variability is to be expected. Lower mortgage rates will tend to ‘float all ‘boats’, so the outlook for a modest recovery in values this year is likely to be replicated across regional markets too,”
‘Rampant boom in property values in 2025 seems unlikely’
Davidson said that while the trend toward growth was good for many, aspiring buyers would likely not be thrilled.
“That said, with listings still abundant and debt to income ratio limits set to be a restraint if and when banks’ serviceability test rates fall further, a rampant boom in property values in 2025 seems unlikely.”
Looking ahead, Davidson said property values “may not necessarily maintain positive growth every month in all areas”, with stock listings on the market at multi-year highs.
He said conditions did seem to favour gradually rising values over the medium term “with mortgage rates having fallen, alongside better news from the underlying economy and labour market”.
“We’ve already seen that mortgaged investors are eyeing up the property market again after a few quieter years in 2022 and 2023.”
“Mortgage interest deductibility returning to 100% from 1st April will be a consideration, while the falls in interest rates themselves are likely to have been the dominant factor – reducing those cashflow top-ups that are typically required out of other income.”
He still anticipated “plenty of opportunities” for first-home buyers to get on the ladder, with values still “considerably lower” than the post-Covid peak seen in many parts of the country.
“A more liquid and faster-moving market may also help existing owner-occupiers to get their house sold and allow them to press ahead with the next purchase too.”
“All in all, there are likely to be more property sales in 2025 than 2024, with values rising. But there are also enough reasons out there to think this upturn will be more muted than in the past,” he concluded.
