An aerial view of an Auckland suburb showing many blocks of housing. Photo: RNZ / Kate Newton
Residential property values have been little changed over the first quarter of the year amid ongoing soft market conditions.
"Residential property values continue to bubble up and down slightly from month to month but have been kept virtually motionless as a whole throughout the first quarter of 2025," QV operations manager James Wilson said.
The latest QV House Price Index shows home values crept up 0.2 percent to a national average of $903,928 in the March quarter, down half a percent on the three months ended February, down 2.3 percent on last year and 15 percent below the market's peak in late 2021.
"Although interest rates have reduced markedly, buyers are still finding the current economic climate to be a challenge," Wilson said.
"Job worries and a rise in unemployment are causing many to be cautious and play it safe right now, which is understandable.
"A sizeable surplus of properties for sale is another [factor]."
Whangarei (2.6 percent), Rotorua (3.6 percent), Nelson (1.7 percent) and Christchurch (1.1 percent) recorded average home value growth in excess of 1 pecent in the first quarter, while Auckland (-0.1 percent), Wellington (-0.3 percent) and Hamilton (-0.3 percent) recorded small losses, and home values in Palmerston North and Dunedin remained steady.
"You don't have to walk very far around the neighbourhood these days to see a 'for sale' sign," Wilson said.
"Ample properties for sale and a lack of meaningful competition are helping keep prices really flat for now. That's no bad thing, as first-home buyers continue to make up a larger share of the market overall."
However, Wilson said there was growing evidence to suggest investors were beginning to re-enter the market again following changes to the interest deductibility rules and recent interest rate reductions.
"Investor activity continues to increase relative to first-home buyer activity.
"A 'getting in early' mindset appears to be emerging in some key areas with interest rates only expected to reduce further. But this is also being tempered by a cautious approach to the economy."
Wilson said the market outlook for the next few months was expected to remain flat, even as economic conditions improve.
"It's going to take some time before interest rate relief fully takes hold and for the labour market to regain its footing again. In the meantime, those who are in a position to purchase are going to benefit from having a wider selection to choose from," he said.
"When the economy does eventually recover and all the excess stock that is available for sale on the market today is sold, that's when we will see some more sustained home value growth."
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
