New data from Corelogic shows that property values fell 0.4 percent in November. File photo. Photo: RNZ
New Zealand's property market is likely to stay relatively flat until at least February or March next year, Corelogic says.
It has released its latest data, which shows that values fell 0.4 percent in November.
They are 17.7 percent below the Covid peak but 16 percent higher than pre-Covid.
Wellington's prices were down 1 percent for the month, and central Wellington's prices are now down 7 percent on a year earlier.
Auckland's dropped by 0.4 percent in the month. Across Auckland, values are 3 percent to 4 percent lower than a year ago.
Chief property economist Kelvin Davidson said the housing market was in a holding pattern and Wellington and Auckland illustrated some of the problems.
In Wellington, people were worried about their jobs, and in Auckland, buyers had a lot of properties to choose from - including existing homes and a large number of new builds.
"If there's a lot of supply and it outweighs demand, we see downward pressure on values."
He said the market as a whole was "ticking along". "At a national level, values are falling but the falls are pretty minor.
"The rate of decline in property values across the country has slowed lately, from an average of 0.8 percent per month from April to August, back down to an average of 0.3 percent falls over September to November. That might signal a floor for values is getting closer."
Davidson said December and January would be quiet for the market anyway and it would not be until February or March next year that new trends could show through. "That will be an interesting period for where things are going."
He said it was likely that the market would pick up next year as the impact of lower mortgage rates was felt and the wider economy improved.
"As we've seen many times before, the ability of lower mortgage rates to kickstart housing market sentiment and sales transactions, as well as property values, shouldn't be underestimated. But it's also important to note that there are several factors pushing in the other direction at present."
Falling servicing rates were also helping buyers, he said. These are the rates used to test whether borrowers can afford a loan.
They are now around 7.5 percent after being as high as 9 percent earlier in 2024.
He said there was likely to be a "decent" window of opportunity for first-home buyers next year, even if prices started to rise again.
"[Price rises] are not going to be massive and in the meantime you might save a bit on your mortgage rate. It's always swings and roundabouts. I can't imagine the overhang in listings we have right now will dissipate very quickly either. There are good levels of choice. If it was me, I wouldn't be rushing.
"But there is always that psychological element that can kick in pretty quickly and things can start to grow perhaps quicker than we're expecting but at the moment if you look at the fundamentals it's hard to see that coming through."
He said debt-to-income ratios could limit the speed of any increase in prices.
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