Capital prices top main centres

Wellington’s property prices led the pack among the New Zealand’s main centre in the last month, according to CoreLogic.

Upper Hutt was the region’s star property performer in the House Price Index, while Porirua’s values took a dip.

The inconsistent nature of the market upturn was evident again through March, with Wellington rising 0.9%, and Christchurch, Dunedin and Auckland also showing gains of between 0.4% and 0.6%. Tauranga and Hamilton both edged down 0.2%.

For the quarter, Wellington’s average gain of 1.6% was significantly higher than New Zealand’s average of 1.1%.

At $923,033, Wellington’s average value was still down almost 19% from its peak in late 2021. The average national house price was down 10% from its peak to $934,806.

CoreLogic chief property economist Kelvin

Davidson said the run of three softer results in a row at the national level was expected, given stretched housing affordability.

He said digging beneath the surface in Wellington, there was also evidence of variable performance.

Upper Hutt prices rose 2.3% in March, with Kāpiti Coast and Wellington City also posting solid growth. However, Lower Hutt and Porirua both saw values slide.

“It’s interesting to note the falls from the peak remain pretty large in Wellington, even after recent growth. Take Lower and Upper Hutt as examples, where values are still down from the peak by around 20% in both areas.

“That decline probably isn’t doing much for the moods of homeowners who purchased at the tail-end of the boom, but on the flipside, it may present a good opportunity for prospective new buyers,” Davidson said.

Hutt Valley real estate agent John Ross, of Professionals, said they were noticing the variable market with a “slow, slow” trend upwards.

“The market is bouncing around a bit depending on the home, the location, the presentation. Sometimes it feels like it changes week by week.”

Ross said the upward movement was gradual enough that more people were able to save for a deposit before it became unaffordable.

“It’s so slow that you could probably save your way ahead of it.”

CoreLogic described the national situation as “not too hot, not too cold”.

“High mortgage rates remain a big challenge at the forefront of all borrowers’ minds, whether they’re taking out a new loan or repricing an existing mortgage,” Davidson said.

The new tax year and 80% mortgage interest deductions would help cashflow for property investors, but it was unlikely to be enough to trump high interest rates, he said.

“While the first official cash rate cut in the next cycle is getting closer, it’s certainly not here yet.

“If the Reserve Bank’s current projections prove to be correct, the cash rate may not start to fall until next year, highlighting that shorter-term fixed mortgage rates may not drop much for at least another six to nine months.”

“The market is bouncing around a bit depending on the home, the location, the presentation. Sometimes it feels like it changes week by week.” John Ross, real estate agent