Photo: RNZ / Nate McKinnon
The downturn in the housing market appears to be at an end, but the recovery is expected to be slow.
CoreLogic's national House Price Index (HPI) posted the first rise in property values since March 2022, up 0.4 percent in October and 0.1 percent over the past three months.
CoreLogic NZ chief property economist Kelvin Davidson said the latest figures confirmed the end of the recent housing market downturn, with a total peak-to-trough decline of 13.2 percent or roughly $138,000 on the average value.
The average house value rose to nearly $909,000 in October, which was still 25 percent above March 2020's pre-Covid level.
"The key fundamentals for house prices have been looking stronger for a reasonable period of time now," Davidson said.
"October's data has brought that first increase at the national level, but it's early days and there's still a lot of diversity in market conditions across the country."
Davidson said a new government was likely to further bolster housing market confidence, despite high mortgage rates edging higher.
Record migration was also expected to drive up demand and prices, while easing labour market shortages.
"The resilience of employment has meant the vast majority of households have successfully managed to rejig their finances as they reprice from older, lower fixed rates, onto today's higher levels," Davidson said.
He said prices were also likely to lift as the flow of new listings remained low.
"As a result, there's been a re-emergence of some degree of competitive price pressures, as buyers attempt to secure a property in a market where there's a bit less choice," he said.