Queenstown's average home value went in the opposite direction to almost every other urban centre in New Zealand in the last quarter, the latest QV House Price Index shows.
Buoyed by a big April, the town recorded 2.8% average home value growth for the most recent quarter. Its average home value was now $1.7 million, which was 5.3% higher than the same time last year, compared with an average annual decrease of 13.3% nationally.
In a statement, QV registered valuer Greg Simpson said selling prices in the Queenstown-Lakes district were well above other districts and that was likely to continue given the recovery of the tourism industry and the general shortage of housing in Queenstown and Wanaka.
Nationally, the average home value was zeroing in on the $900,000 mark following yet another month of widespread decline across the country.
Values reduced by an average of 4.5% throughout the first four months of 2023, including an average reduction of 0.6% in April — a marked improvement on the 1.4% average decline recorded in March.
The national average home value was now $902,501, which was 13.3% less than the same time last year but 22% higher than before the Covid-19 pandemic began in New Zealand in late February 2020.
In Dunedin, the city’s average home value went down by 2.2% in April to $619,622, compared with a 0.4% average reduction in March. Annually, home values were now 11.3% lower than at the end of April last year.
Valuer Rebecca Johnston said supply continued to exceed demand. With so much choice and so few active buyers, properties requiring maintenance, repairs and upgrades were viewed less favourably, often requiring extended marketing periods and vendors having to lower their expectations. Investors were continuing to "take a back seat for the most part", as they were feeling the pinch of higher interest rates.
"Some have consolidated their portfolios, offloading debt to ease some pressure by reducing sale prices to achieve quicker sales. Off-plan townhouses continue to be their preferred investment choice, with no bright-line test applicable to new builds, as well as mortgage interest deductibility compared to existing builds," she said.
In Invercargill, home values increased for the first time in six months. The average home value was $455,098 at the end of April, a 0.6% improvement on QV’s March figure but still 3.7% lower for the quarter and 8.2% down on what it was a year ago.
There was still much less demand now compared with early 2022 and a greater number of properties on the market.
That was particularly evident for entry-level housing, where investors were now limited due to continued interest rate increases and changes to tax deductibility rules.
— Staff reporter
