Photo: RNZ / Nate McKinnon
The residential housing market is continuing to move sideways, as mortgage rates remain high and sales volumes stay low.
Data from property researchers CoreLogic, showed home values rose 0.3 percent in February (compared to 0.4 percent growth in January) but fell 1.4 percent from a year ago, to an average value of $930,495.
Average values had risen for five consecutive months, but the pace of gains had slowed, it showed.
All the main centres recorded growth of less than 1 percent in the month, while on an annual basis, Christchurch saw the biggest jump, up 1.6 percent.
CoreLogic NZ chief property economist Kelvin Davidson said buyers and sellers were taking their time, and it was flowing through to muted price increases.
"For new entrants to the housing market, there are still significant challenges in terms of saving the deposit and satisfying loan serviceability criteria," he said.
"Investors are also facing challenges from high mortgage rates too, while even existing owner-occupiers looking to move up the ladder still need to assess their finances closely."
Davidson said a further rate hike from the Reserve Bank remained on the cards, despite Wednesday's decision to hold.
With cuts out of the picture for the foreseeable future, he said short-term fixed mortgage rates could remain high "for a while yet".
"As a result, we could continue to see mixed results across the housing market, with localised factors affecting each region and stretched affordability continuing to restrict growth in property demand and therefore price growth too," Davidson said.
CoreLogic expected national sales volumes to grow about 10 percent in 2024, with prices rising by about 5 percent.
"But that's coming from a low base, and the averages could also mask quite a bit of regional variance, with the main centres boosted by stronger population growth, yet some other areas perhaps held back by affordability concerns," Davidson said.
"First home buyers are still enjoying market conditions for now, using KiwiSaver for at least part of the deposit, and making full use of the low deposit lending allowances at the banks."
On the other hand, he said mortgaged investors remained on the sidelines.
"However, they're a group to watch closely in the coming months, as tax and lending regulations shift."