New Zealand’s housing market downturn is officially over with average prices having fallen a total of $138,000 from the record highs set in late 2021, while Auckland prices were the hardest-hit, falling $261,000 over the same time. 

That’s according to analyst CoreLogic, which said its national House Price Index - a rolling three-month market tracker it says is the most reliable measure of price change - recorded its first rise since March 2022, jumping 0.4 per cent last month. 

“These figures confirm the end of the recent housing market downturn, with a total peak to trough decline of 13 per cent - or roughly $138,000,” CoreLogic chief property economist Kelvin Davidson said. 

Yet despite the market’s dramatic 18-month crash, New Zealand house prices remain sky-high for many prospective buyers. 

“At just short of $909,000 in October, average values are still almost 25 per cent above the pre-Covid levels of March 2020,” Davidson said. 

Auckland’s prices are now also beginning to recover after it was the hardest-hit region by value during the downturn, with values falling 17 per cent. 

Its average value is now $1.26 million after a 0.2 per cent rise in October. 

Wellington was the next hardest-hit main centre, with the average value falling $248,000 or 22 per cent during the downturn - the highest per cent hit in the country. 

Its average value is now $893,417 after a 0.3 per cent rise last month. 

Tauranga is the only one of the six main centres to continue falling last month as the CoreLogic index showed prices down a further 0.1 per cent in October for an average value of $1m. 

Average values in the city have now fallen $179,000 or 15 per cent during the downturn. 

Elsewhere, Hamilton’s average value fell $121,000 or 13 per cent during the downturn, Christchurch’s value fell $50,000 or 6 per cent, and Dunedin’s fell $104,000 or 15 per cent. 

With prices now swinging back into the positive, Westpac chief economist Kelly Eckhold is tipping them to jump significantly next year, given migration has led population growth to run at a “multi decades high” level that will boost demand for housing. 

“Higher long-term interest rates will restrain future house prices to some extent but the impact of the surge in population will be significant. On balance, we expect house prices will rise by 8 per cent over 2024,” Eckhold said. 

Owen Vaughan said the latest House Price Index data compiled by his property website OneRoof, together with analysts Valocity, backed up evidence the market had turned. 

Vaughan’s index showed quarterly prices had now grown for the second month in a row. 

Property values in the country’s biggest housing markets, Auckland and Canterbury, were up by more than 2 per cent in the three months to the end of October, while New Zealand’s average property value grew 1.7 per cent over the same period to $952,000, he said. 

“Market confidence has been strongest in the bigger centres, but is starting to spread to smaller regional metros,” Vaughan said. 

“Whangārei, Napier and Invercargill all turned the corner in October. The biggest success story continues to be Christchurch. Its average property value was up 2.5% over the quarter to $768,000, driven by strong first home buyer activity.” 

Overall, 566 suburbs recorded quarterly growth in the three months to the end of October - 100 more than the month before, according to the index. 

OneRoof-Valocity also found that of 927 New Zealand suburbs analysed, 32 have returned to or are close to returning to the record high values they reached during the Covid boom. 

Along with strong migration, house prices are expected to get a boost from new policies that the incoming National-led Government has promised to introduce, Valocity global chief executive of real estate Helen O’Sullivan said. 

These changes include allowing property investors and holiday homeowners to use mortgage repayments to lower the amount of tax they pay and to also avoid paying capital gains tax on homes they resell after two years of ownership. 

Yet despite those boosts, O’Sullivan said she didn’t believe house prices would surge significantly as long as interest rates remained high and put pressure on the ability of homeowners to afford to buy new houses. 

Ben Leahy is an Auckland-based journalist covering property. He has worked as a journalist for more than a decade in India, Australia and New Zealand.