Average house values falling by double-digit percentages

November 9, 2022

A growing list of cities, towns and regions are seeing average house values fall by 10% or more this year.

Wellington has seen the largest drop of -17.6% in 2022, while prices have also fallen in Palmerston North by -13.7%, Auckland by -11.7% and Napier by -11.6%, according to the latest QV House Price Index.

The average home value is 3.9% less this quarter, ending in October, and is now 9.7% lower since the start of 2022.

The national average house price is now to $951,040, 5.1% lower than in November 2021.

QV chief operating officer David Nagel said the recent value fall can be linked to the traditional "spring upswing" in the residential property market.

"Spring is often seen as a good time to sell with longer days and summer looming large on the horizon. This has kept downward pressure on prices, especially as interest rates have also risen and are expected to climb further to stifle high inflation."

Nagel said the value drop across New Zealand in the past 12 months is the most dramatic he's ever seen.

"At the same time last year, the QV House Price Index was showing an average home value increase of 22.2% throughout the first 10 months of 2021 – now it's showing an average decline of 9.7% over the same period. I can't think of two more starkly contrasting consecutive years in my long career as a registered property valuer."

Queenstown is the only region to see an average increase in property value, a 2.9% rise this quarter to $1,700,421, a 4.9% jump since the start of the year.

QV property consultant Greg Simpson said market conditions are highly uncertain in the region, but inflation will likely slow down the rising prices.

"We note that there is currently reduced sales volumes and tapering but still positive value growth for residential property. With inflation now becoming more entrenched, further interest rate rises are expected from the major lenders, which will continue to have a cooling effect on the housing market."

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