Auckland's house values fell 0.8 percent last month. File photo. Photo: 123rf
House values are falling, with Auckland leading the way, according to CoreLogic's House Price Index.
The index indicates that the average property value fell 0.2 percent last month over April, though rose 1 percent to $931,438 on the year earlier.
CoreLogic NZ chief property economist Kelvin Davidson said the shift in the market was clear to see, with values down 11 percent from the market's peak.
Auckland saw values fall 0.8 percent last month, with Wellington down 0.6 percent, Tauranga down 0.5 percent. There was a value increase of 0.5 percent in Christchurch and gains of 0.8 percent in both Hamilton and Dunedin.
Davidson said regulatory changes - including the abrupt scrapping of first home grants, an easing in loan to value banking restrictions and the introduction of debt-to-income caps - added to market uncertainty.
"But with mortgage rates tipped to remain high for a while yet, it's no surprise the market has lost a bit of the momentum we had been seeing through the early part of this year," Davidson said, adding the forthcoming tax relief for households was unlikely to change the current state of the market.
"An important factor still in play is the high stock of listings on the market, and the associated shift in bargaining power towards buyers, which is subduing prices."
But he said there could be more listings on the market with a shortening of the brightline test to two years from 1 July, freeing about 50,000 properties from capital gains tax.
"Of course, only a portion of those properties will actually be put up for sale," he said.
Job security was also adding to market uncertainty.
"On another note, borrowers who have faced higher interest rates as their previous mortgage deals come to an end have coped pretty well with tight monetary policy thus far, thanks largely to the strong labour market," he said.
"Looking ahead, a little less job security could see housing activity and prices remain fairly subdued."
Outside the main centres, the housing market was also mixed, with small value gains in Whanganui, Rotorua, and Queenstown with falls in Invercargill, Hastings and Nelson.
"Many provincial parts of NZ are also dealing with some migration issues, such as younger people heading overseas. That could well be taking a bit of steam out of the property market in these areas."
Davidson said high mortgage rates presented challenges for all markets, whether they were large or small.