Don’t expect house price rises any time soon - QV

Tuesday, 21 January 2025

The average national house price was $902,414 in December, according to QV.

New Zealand’s average house price was 0.3% less in December than it was at the start of the year, and there’s no evidence prices will increase substantially any time soon, Quotable Value (QV) says.

The property valuation company’s latest House Price Index is out, and it has the average national price at $902,414 in December, down from $905,707 at the same time last year.

While prices inched up 0.1% over the December quarter, the national average remains 5.2% below the market’s late 2021 peak.

But prices increased in all but three of the 16 urban areas monitored over the last quarter.

Napier recorded the biggest quarterly rise, up 2.9% to an average of $749,297, and it was followed by Hamilton with a 2.3% increase to $789,995.

Westpac's Economic Overview suggests a brighter future for New Zealand, projecting over 2% growth in 2025. With mortgage rates falling, an 8% rise in house prices is anticipated as investors return to the property market.

In Auckland, Wellington and Christchurch prices were up 1.3%, 0.4% and 1.1% to $1.24 million, $841,489, and $766,388 respectively.

Prices in Rotorua, Queenstown and Marlborough fell by 2.3%, 1.4% and 0.7% to averages of $647,706, $1.82m and $696,762.

QV operations manager James Wilson said it had been “steady as she goes” over much of last year, and there was little evidence to suggest prices would “suddenly go from flat to flat-out in the immediate future”.

It was a new year, but the same restraining factors were still very much at play, he said.

Those factors included sustained weakness in the labour market, the high cost of living, credit constraints, and a surplus of properties for sale on the market.

“The marked uplift in demand for housing that has come as a direct a result of falling interest rates has not yet converted into any significant price pressure, so we’re only seeing very small pockets of growth.”

But fewer urban areas saw price declines over the last quarter, and that indicated the market was now at or very close to equilibrium, he said.

“We can expect to see more investors return to the market throughout 2025, especially if interest rates drop markedly further.

QV’s James Wilson says he expects to see more house price growth this year than last.

“That will put a bit of price pressure on first-home buyers, who have picked up a larger share of the market in recent times.”

In the longer term, he expected to see more growth this year than last, he said.

“But it looks as though the economy is still in a dark place right now, and debt to income ratios should still keep a lid on things in the year ahead.”

Trade Me Property’s latest house price figures were out late last week, and they also showed the market was quiet heading into the summer period.

The national average asking price for a property listed on the site fell 0.6% to $849,550 in December, after a three month run of increases.

Nationally, there was a 30% drop in demand for properties on the market, and that was the biggest drop of the year, Trade Me reported.

But banks have forecast price rises will come this year, with BNZ and ANZ picking them to go up by 7% and 6%.