New Zealand's house values remain about 16 percent below the boom-time peak of $982,918 in January 2022. File photo. Photo: 123rf
House values have fallen for the fifth month in a row, but cheaper prices are not expected to move an abundance of housing stock until interest rates get the chop.
Corelogic's latest home value index shows there was a 0.5 percent fall in July, which takes the total decline from February's mini peak to 2.5 percent.
The median value for stock nationally is now $827,515.
Head of research Nick Goodall said a significant drop in interest rates was needed to get the market growing and moving again.
"The dynamics are a little bit in balance as there's reason for demand, but that demand is held back by tight credit.
"Even though investors might be in a better environment today than they were a few months ago with all those changes such as shortening the bright line test, interest deductibility being brought back in, but if they're willing to buy, they're still held back by their ability to get enough lending to actually purchase a property. So still relatively balanced and all about those interest rates."
He said once affordability improved with lower interest rates, some upwards pressure will be put on house prices.
Auckland and Wellington recorded the softest figures in recent months, each falling 2.7 percent since April. Christchurch was more stable with only a 0.1 percent fall in July.
Goodall said Auckland was still a relatively expensive market, but was particularly weak given high interest rates.
"Despite strong migration levels into the country, many of whom moved to Auckland, providing underlying demand for property, we are seeing that weakness across Auckland probably just because affordability is so stressed by high interest rates."
Nationally house values remain about 16 percent below the boom-time peak of $982,918 in January 2022.
But they are still about 19 percent higher than the pre-Covid level.
