Robust Conclusion to 2023 Bodes Well for Real Estate Sector
The CoreLogic House Price Index revealed a third consecutive rise in average property values in December, with momentum building in New Zealand’s residential real estate sector.
Following a 0.4% increase in October and
a 0.7% gain in November, December saw a rise in property values of 1.0%. The December growth marks the most significant monthly increase since January 2022, which saw a gain of 2.1%.
The current average value is $924,489, reflecting a 2.1% uptick over the past three months since hitting a cyclical trough in September.
The positive gains were widespread across the leading centres in December, with Tauranga, Auckland, and Christchurch all registering increases of more than 1%.
CoreLogic NZ Chief Property Economist Kelvin Davidson acknowledged that while the increase in property values during December was expected, he’s also anticipating a degree of continued ‘patchiness’ in 2024, both in terms of the changes from month-to-month, as well as variability across the regional markets.
“A further rise in property values in December seemed almost inevitable given housing market sentiment has risen in recent months. This is off the back of several factors, including the change of government, a peak - and even some falls - in mortgage rates, continued growth in employment, and soaring net migration,” Kelvin said.
In December, Manukau exhibited the most robust increase in property values within Auckland, rising by 2.1%. Meanwhile, Wellington’s sub-markets, particularly Lower Hutt, experienced notable growth during the same period, recording a gain of 2.6%.
Since September, Lower Hutt has seen a cumulative increase of 4.5%, surpassed only by Porirua, which achieved a quarterly growth of 4.9%, resulting in an annual change of 1.1%.
Keith Niederer, General Manager NZ, Raine & Horne, pointed out that price rises in December had occurred against a backdrop of lower listings.
“That said, in recent months, there has been a notable increase in housing market sentiment, driven by various factors such as a change in government, steadying mortgage rates, sustained employment growth, and a significant surge in net migration.
“These factors have enabled the real estate market has firmly regained its momentum. With the Raine & Horne network expanding rapidly through the acquisition of the Mike Pero Real Estate network, property owners and buyers can anticipate favourable market conditions in 2024.”