The national average value fell 2 percent in the three months ending August. File photo. Photo: RNZ / Cole Eastham-Farrelly
National house values continue to fall, with plenty of stock available helping to keep prices down.
The latest QV House Price Index shows the national average value fell 2 percent in the three months ended in August over the year earlier, but was up slightly from the previous three months ended July.
The average home was valued at $905,357, which was little changed from the start of the calendar year.
"This is reflective of a housing market that has been severely constricted by strong economic headwinds - including rising unemployment, credit constraints and, of course, high interest rates," QV operations manager James Wilson said.
While interest rates were coming down, the glut of houses on the market was keeping values down.
"Values will tighten again when prospective buyers aren't as spoilt for choice as they are currently, which could take a while," he said.
The largest cities saw the biggest drop in average home values with Auckland properties down 2.8 percent and 3 percent down in Wellington, which was the seventh consecutive month of negative growth for the capital city.
Other centres also recorded drops in value led by Hamilton (-1.7 percent), Tauranga (-1.5 percent), Christchurch (-1.3 percent) and Dunedin (-1.1 percent).
"An abundance of real estate listings - especially in and around our largest cities - is expected to keep a firm lid on home value growth, even as increasing numbers of buyers start coming out of the woodwork as we move into spring," Wilson said.
"Their prevailing mindset now seems to be one of cautious optimism, that we're almost through the worst of it and now is a good time to see what's happening out there in the market."
He said spring traditionally marked the beginning of the selling season.
"More investors will look to sell properties following the changes to the bright line test back in July, and sellers who pulled their listings after trying and failing to sell earlier in the year may even look to try again now that there's an uptick in activity and a general sense that confidence amongst buyers is increasing."
