House values slide again as buyers refuse to chase vendors

Summarised by Centrist

New Zealand’s average residential property value fell 1.5 per cent in the three months to the end of July, according to Quotable Value, taking the national average to $898,799.

QV spokesperson Simon Petersen said the market was not experiencing another dramatic crash. Instead, he said: “This isn’t another sudden correction. It’s an already subdued market losing what little momentum it had built earlier in the year.”

That is probably more unsettling for homeowners. A clear crash creates its own pressure to clear the market. A long, cautious decline leaves sellers hoping for yesterday’s price while buyers wait for tomorrow’s bargain.

Petersen said winter had put “a further chill through the market”, while “the prospect of higher borrowing costs and ongoing economic uncertainty have given buyers even less reason to rush”. 

Buyers appear to be looking past headline rate cuts and weighing their broader confidence in employment, inflation, insurance and the economy.

The weakness is not evenly spread. QV recorded declines in Auckland, Wellington City, Gisborne, Greymouth and parts of Hawke’s Bay, while a handful of centres, including Tauranga, Christchurch, Timaru, Queenstown and Invercargill, managed modest gains.

For sellers, the lesson is that a listing is not a sale. Buyers have more choice than they did during the boom, and they are much less willing to stretch just because a vendor has anchored on a 2021 or 2022 valuation.

Read more at Interest.co.nz and QV House Price Index

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