Extreme weather events across the top of the North Island have done less than nothing to halt a slow decline that has seen home values reduce nationally by an average of 1.1 per cent in January.

Quotable Value chief operating officer David Nagel expects home values in flood-stricken parts of Northland, Auckland, and Bay of Plenty are likely to recover 'fairly quickly”.

He says the record amount of rainfall has been yet another obstacle for potential buyers and sellers to deal with at a time when house sales are already at an historic low.

'It's hard enough that people are already grappling with rising interest rates, inflation, and a still increasing cost of living.

'Now many people in the upper North Island have been having to deal with cleaning up after some pretty extreme weather. It's little wonder that it's been a slow start to the year for the residential property market – I'd suggest it's probably going to stay that way for a while yet.”

Otherwise he says the new year had started more or less how the old one ended – with widespread home value reductions across much ofNew Zealand.

The latest QV House Price Index figures for January show the national average home value fell by 1.7 per cent this quarter to $934,761, which is 0.5 per cent worse than QV's December quarter figures.

None of the country's main urban centres were immune this quarter – not even Queenstown, which experienced its first quarterly decline since August 2020.

Home values continue to slip away fastest around the bottom half of the North Island. Palmerston North and Hastings posted the largest reductions on average this quarter at 3.3 per cent and 3 per cent respectively.

The Wellington Region also showed significant declines this quarter with an average home value reduction of 2.8 per cent, and continues to top the list of average negative home value growth annually at 20.4 per cent – well above a national average annual decline that now stands at 12.1 per cent.

'Has the property market started 2023 how it will go on? Only time will tell for certain, but it certainly looks as though the market hasn't hit bottom yet.

'As a result, it seems many prospective buyers are being very cautious right now, waiting to see exactly how far prices will fall. Others are finding it too difficult to obtain finance, or are unwilling to make such a commitment given the very high level of economic uncertainty right now.

'So it looks as though this summer will probably continue to be a relatively quiet one for the residential property market for the time being at least, especially by recent standards. I certainly hope it's at least a sunnier one than it has been so far for many of us.”

Tauranga

Has the residential property market started as it means to go on in 2023?

Tauranga has welcomed the new year with a 2.1 per cent decline in average home value for the month of January. The city's average home value is now $1,054,130, which is precisely 12 per cent lower than the same time last year.

QV property consultant Derek Turnwald commented: 'Many prospective buyers are holding off making property purchases while prices continue to fall, so there still is a fair bit of pent up demand. Open home attendance is improving slowly – this is typical in summer when the weather is typically more conducive to looking over properties, which hasn't always been the case this time around. Auction attendance and results are also improving.”

'The next OCR announcement by the Reserve Bank is on 22 February. Inflation remains stubbornly high according to the latest update showing that consumer spending has not yet slowed, and therefore it's likely that there will be more OCR increases, putting further downward pressure on prices,” Mr Turnwald added.

Waikato

Will the property market halt its slow decline in 2023? It has certainly been a slow summer so far in the Waikato.

Home values have fallen across the greater region by an average of 2 per cent in the three months since the start of November 2022. That includes a small 0.6 per centaverage decline in January 2023, which is a little better than the national average of a 1.1 per cent decline last month.

In Hamilton, the average home value has dipped 2.1% to $807,507 this quarter, which includes a 1.5 per cent drop last month. The city's south-eastern and north-eastern suburbs have experienced the largest declines over the past 12 months and in the most recent quarter, falling by an average of 5 per cent and 3.2 per cent respectively since November.

Local QV registered valuer Tom Schicker commented: 'Sales volumes are significantly lower than at the same time last year, which is understandable given the major shift in market sentiment and conditions during that time. There is no sign of interest rates easing while annual inflation is still high, which continues to push up the cost of living.”

'Especially at the lower end of the market, we are seeing the higher interest rates restricting the number of eligible first-home buyers, and restrict all buyers in general,” he added.

Rotorua

Home values continue to slip away in Rotorua at an average rate of 2.3 per cent this quarter.

Rotorua's average residential property value was $666,304 as of 31 January 2023, which is 11.6 per cent lower than the same time last year.

Local QV property consultant Derek Turnwald said a two-tiered market had developed within the larger Rotorua residential property market. 'Demand for residential property remains subdued generally, but the market in the higher-end suburbs and lakeside properties remains reasonably strong.”

He said demand for lifestyle properties within the Rotorua District was also reported to be reasonable, with prospective buyers in the higher price brackets often being in a better financial position to be able to service higher interest rates.

However, he said it wasn't all bad news for first-home buyers. 'First-home buyers have been showing more interest in the local market lately, with open-home attendance improving over spring and early summer. Though it appears that most buyers are still waiting to see how far prices will fall.”