Price growth over the first quarter was patchy across the main centres, with Wellington rising strongly at 0.9 percent (file image). Photo: RNZ / Dom Thomas
Continuing high interest rates and an increase in the number of houses for sale are keeping a lid on price growth.
CoreLogic's House Price Index rose 0.5 percent in March, similar to January and February's muted gains, taking values 1.1 percent up over the first quarter of 2024.
CoreLogic NZ chief property economist Kelvin Davidson said the run of three softer results in a row at the national level was expected.
"NZ's housing market can probably be described as 'not too hot, not too cold'," Davidson said.
There had also been an increase in listings in the first quarter, which had helped to take the heat out of price increases.
"The general sense is that the so-called sellers' market of late 2023 has now switched back in favour of credit-approved purchasers," Davidson said.
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The average property value rose 3.2 percent in March to $934,806, but still more than 10 percent down (-$108,455) on the most recent peak.
"High mortgage rates remain a big challenge at the forefront of all borrowers' minds, whether they're taking out a new loan or repricing an existing mortgage," he said.
"While the new tax year and 80 percent mortgage interest deductions will help cashflow for property investors, it's unlikely to be enough to trump high interest rates."
He said price growth over the first quarter was patchy across the main centres, with Wellington rising strongly (0.9 percent), while Christchurch, Dunedin and Auckland also showed gains between 0.4 percent and 0.6 percent.
However, Tauranga and Hamilton edged down 0.2 percent.
"While the first official cash rate (Reserve Bank's OCR) cut in the next cycle is getting closer, it's certainly not here yet.
"Indeed, if the Reserve Bank's current projections prove to be correct, the cash rate may not start to fall until next year, highlighting that shorter-term fixed mortgage rates may not drop much for at least another six to nine months."
