According to CoreLogic’s Home Value Index (HVI), property values rose by 0.3 per cent in February, marking the strongest increase since January last year.
This follows a cumulative decline of 4.1 per cent between March and September 2024.
The national median property value now stands at $807,164, which remains 16.9 per cent below the record highs of late 2021 and early 2022, but is still 17.1 per cent above pre-COVID levels from March 2020.
Most major centers showed positive movement in February, with Christchurch and Dunedin both recording increases of 0.6 per cent, while Hamilton saw values rise by 0.5 per cent.
Auckland experienced a 0.3 per cent increase, and Wellington values edged up by 0.1 per cent, a notable change from its average monthly decline of 0.7 per cent over the previous 11 months.
CoreLogic NZ Chief Property Economist Kelvin Davidson said the modest growth was anticipated, given earlier indicators pointing to a recovery.
“The rise of 0.3 per cent in the national median property value is fairly modest by past standards but nevertheless represents the first meaningful increase for more than a year,” Mr Davidson said.
He said that property value falls in 2024 were expected to end in early 2025, driven by interest rate cuts that began in mid-2024.
The national trend masks considerable regional variation, with some areas still experiencing declines.
Tauranga saw values edge lower by 0.2 per cent in February, while regional markets showed mixed results. Whanganui dropped by 0.6 per cent and Hastings declined by 0.4 per cent, while Queenstown and Invercargill showed stronger growth at 0.8 per cent and 0.9 per cent respectively.
Auckland’s recovery was broadly based across its districts, with Franklin and Auckland City both recording gains of 0.5 per cent, and North Shore rising by 0.3 per cent.
Only Manukau showed a slight decline of 0.1 per cent.
Mr Davidson said that elevated stock levels may temper future growth but indicated the market’s soft patch appears to be over.
“The sentiment on the ground across Auckland has been more positive of late, and February shows this has been translating into the hard data,” he said.
Wellington’s property market also showed improvement after a period of weakness, with Kapiti Coast, Lower Hutt, and Upper Hutt all recording increases in February.
Looking ahead, Mr Davidson suggested that while property values may not show positive growth every month in all areas, the overall trend appears favorable for gradual increases.
“Conditions do now seem in favor of gradually rising values over the medium term, with mortgage rates having fallen, alongside better news from the underlying economy and labor market,” he said.
The return of full mortgage interest deductibility from April 1st is expected to attract more investors back to the market, though Mr Davidson believes the reduction in interest rates has been the primary driver by easing cashflow pressures.
First home buyers are still expected to find opportunities in the market, particularly with values remaining significantly below their post-COVID peaks in many regions.
“All in all, there are likely to be more property sales in 2025 than 2024, with values rising,” he said.
“But there are also enough reasons out there to think this upturn will be more muted than in the past.”
