Photo: RNZ
House values have ended October little changed from the start of the year.
The latest QV House Price Index shows the national average home value fell 0.8 percent in the three months to the end of October, compared with a 1.6 percent average decline in the three months to the end of September.
"New Zealand's housing market remains largely flat overall, with essentially no growth to speak of during the month of October itself - neither up nor down - and only a slight decline nationally this quarter of less than 1 percent on average," QV operations manager James Wilson said.
"Home values have flattened out again after some more sizeable yet still relatively modest reductions throughout the winter months, but they are still showing no signs of taking off anytime soon," Wilson said.
The average home value fell 0.3 percent from the start of the year at $902,231.
"This is reflective of a housing market that is still severely constricted by strong economic headwinds - despite recent interest rate reductions, which will still take some time to phase through."
Values levelled out in most of the main urban areas.
The average three-month rolling rate of decline slowing in Auckland (-0.8 percent), Christchurch (-0.2 percent), Hamilton (-0.6 percent), Tauranga (-1.6 percent), Dunedin (-0.1 percent) and more.
Wellington's average rate of home value decline slowed to 2.3 percent from 3.2 percent in the previous three-month period.
"Heightened job insecurity is being more keenly felt in the capital. Otherwise, most of New Zealand's other main centres appear to be bouncing along the bottom now," Wilson said.
"Interest rate relief is on the way for homeowners, but it will take some time for it to be fully felt. In the meantime, active interest in the real estate market continues to grow.
"With that in mind, it's little wonder why it's still relatively quiet for this time of year and property values remain so weak."
Three urban areas recorded positive growth over the quarter, including Nelson (1.3 percent), Queenstown (1.2 percent) and Whangārei (0.3 percent).
Wilson said there had been marked increase in consumer confidence following recent mortgage rate cuts and a spreading expectation that the Reserve Bank will again cut the Official Cash Rate (OCR) later this month.
"There has been a notable mindset shift in recent times that we're probably through the worst of it now, and that interest rates are going to continue to reduce," Wilson said.
"But this is being balanced out with a high level of stock available for purchase on the market, which is helping to keep prices down, as well as rising unemployment, which is still a very real concern for many."
First-time home buyers were still the most active buyer group, though investors were slowly coming back to the market, along with owner-occupiers who had been waiting for economic conditions to improve.
However, he said housing affordability remained a challenge for everyone, even as economic conditions slowly improve.
"Prospective buyers have to weigh up the benefits of falling interest rates and having a smorgasbord of properties to choose from, versus rising unemployment and increased job insecurity," Wilson said.