No market rebound expected post lockdown

House prices are unlikely to boom after the country comes out of the current lockdown, according to QV forecasts. Sally Lindsay has a round-up of the latest region-by-region House Price Index figures.

After last year’s lockdown property values skyrocketed, but in the past four months the quarterly rate of price increases have slowed, the QV House Price Index shows.

The average value increased 3.3% nationally over the past three-month period to the end of August, down from the 4.3% quarterly growth in July, with the national average value now sitting at $963,046.

This represents an increase of 26.6% year-on-year, up slightly from 26.4% last month.

In the Auckland region, the average value now sits at $1,368,252, up 2.4% over the last three-month period, with annual growth of 24%, up a fraction from July’s year-on-year growth of 23.7%.

QV general manager David Nagel says while prices were still going up as the country headed into the latest lockdown, the growth was at a significantly reduced rate compared to earlier peaks.

“This is the fourth month running that we’ve seen a reduction in the nation’s rolling three-month average growth rate, so the market has clearly been cooling.

“Interestingly, value growth rates are similar to the levels in the middle of 2020 when New Zealand came out of its first lockdown, but pent-up property demand from last year's extended lockdown, plus a stimulated economy as a result of the Reserve Bank’s slashing of the OCR, led to a property market on steroids that became a runaway train.”

Nagel says it is different this time around. “The economy is doing fine without the stimulus that was needed last year.

“Interest rates have nowhere to go but up, which was already signalled prior to lockdown, plus the rate of new builds is at an all-time high.

“Most importantly, house price inflation coupled with reducing credit availability has taken home ownership out of the reach of many New Zealanders,” he says.

The strongest value gains over the past three months have come from Christchurch at 5.8% growth, down from 6.3% last month, closely followed by Napier at 5.7% growth, rebounding back from 3.5% three-monthly growth reported last month.

None of the major urban areas QV monitors have had a drop in average value, but Marlborough remains flat at 0.3% growth, compared to its three-monthly growth rate of just 0.2% last month.

Central New Zealand continues to show the strongest annual rate of value growth, with three of the four fastest growing regions in the lower North Island.

Values in the Manawatū-Whanganui region have grown 36.7% in the past year, while the greater Wellington and Hawke’s Bay regions have experienced annual growth of 33.5% and 32.9% respectively.

West Coast has the strongest annual rate of growth in the South Island at 33.3%.

The three lowest annual growth rates are all in the South Island with the Southland region experiencing a still significant 20% increase, Otago showing 21.5% and Tasman 23.5% annual growth.


House prices were rising faster last month in the Auckland region than the previous month, before the latest Covid-19 alert level four lockdown halted almost everything in its tracks.

The average house price increased by 1.2% in August to $1,368,252, up from the 0.4% in July.

However, QV’s rolling three-month average recorded a slight drop in house price growth for the quarter − from 3.5% to 2.4%.

All Auckland districts recorded less house price growth in the three months to the end of August than in the previous period.

The biggest capital gains were in the Franklin District (6%), followed by Rodney (4.7%), Papakura (3.7%), and the area of west Auckland formerly known as Waitākere City (2.5%).

Though Auckland’s house price growth has slowed considerably this winter when compared to previous highs, the average house price in the region at $1,368,252 is still well up on the same time last year (24%), with all districts experiencing more than 20% value growth over the past 12 months.

Local QV senior consultant Rupert Yortt says the Auckland residential market has had continued low-level growth over the month of August.

“Figures have increased slightly overall in August, which is a change of tune from the slowing rate of growth over the winter months.

“When the region does eventually come out of lockdown, first-home buyers are expected [to] be active. They will have additional savings and more time to plan their buying decisions, while other sectors of the market will be largely unaffected,” he says.

“Market activity is also likely to be relatively stable over the next few months as the market [makes] up for lost time − although further lockdowns for the region would put additional pressure on the economy.

“The delay of the inevitable interest rate rises will also keep the market in a strong position for the time being.”


Whangārei’s residential property market was showing further signs of cooling before lockdown.

QV’s three-month rolling average recorded house price growth of just 2% in the three months to the end of August − down from 3.6% in the three months to the end of July, and 7% in the three months to the end of June.

Across the wider region, house prices in the Far North and Kaipara districts have increased by an average of 7.7% and 3.4% this quarter respectively.


Tauranga’s average house value rose swiftly before lockdown, growing 2.7% in August and 5.1% for the quarter.

The city’s average value now sits at $1,073,422, which is a remarkable 32.5% higher than the same time last year.

Despite this, QV property consultant Derek Turnwald says the market is cooling overall − evidenced by the city’s rolling three-monthly rate of value growth halving from 10.2% in May to 5.1% in August.

“Stats show values increasing at a decreasing amount, which hopefully will lead to a more sustainable level of growth and a more stable market overall,” he says.

But he warned that lockdown could add more upward pressure to prices in the short-term.

“Lockdown has led to a reduced number of new listings in a market that is already witnessing low stock numbers.

“This could mean added excess demand pressure in the short term, applying further upward pressure on values for a little longer.”

Meanwhile, bidding at online auctions during lockdown remained strong, despite investor buyers becoming markedly more subdued following the Government’s changes to the bright-line test and tax deductibility rules.


There was a slight cooling of the Waikato region’s rate of residential house price growth last month.

The region’s average home value increased by 1.3% in August to $827,969, down from the 2.5% in July.

Quarterly value growth dropped from 6.8% to 6%, and there was a monthly drop in the total number of sales in the region.

In Hamilton, house prices increased by 1.6% last month and 4.6% for the quarter, slightly down from 1.7% and 5.2% respectively.

The average house price is now $847,591 − though it’s considerably higher in the city’s north east ($977,214), which is rapidly closing in on a $1 million average price tag.

Local QV property consultant Tom Schicker says agents are still reporting a shortage of quality listings on the market, which will likely be exacerbated by lockdown.

Agents haven’t been able to appraise properties and vendors haven’t been able to prepare properties for sale.

“As a result of this scarcity it’s still common to receive multiple offers from first-home buyers at the entry level, and in general towards properties with any kind of development potential.”

Schicker expects more stock to come onto the market in spring, especially if and when the Covid-19 alert level drops down.


House prices increased by an average of 1% in Rotorua last month, all but making up for the relatively small 1.1% drop in July. The average residential house value is now $690,840.

Local property consultant Derek Turnwald says the rate at which house prices were going up was obviously slowing, as evidenced by QV’s three-month rolling average sinking from 3.1% in July to 1.9% in August.

“There are still a low number of listings and the latest lockdown will further reduce that number.”

“Rotorua’s residential market tends to be quiet over winter. However, this year has been more dramatic than usual.

“Some agents say there is renewed interest from investors − although there’s a sense that they are looking for bargains that sometimes appear in a slowing market.”

Turnwald says inevitable interest rate rises should reduce interest in the market overall, along with loan-to-value ratios (LVRs) and changes to the bright-line test and tax deductibility rules.

“I suspect the region may be about to head into a phase of more sustainable growth.”


House prices continue to grow across the Taranaki region − albeit at a reduced rate compared to previous highs.

The housing market has been hottest this quarter in Stratford, where the average price increased by 8.3% to $481,418.

In New Plymouth, prices have increased by 4.3% this quarter – down slightly from the 4.5% growth we reported last month – while prices in South Taranaki have grown by 5.9% over the same period.

Local QV registered valuer Danny Grace says the market has typically been strongest at the lower end, but there have been continued strong sales of higher value properties and strong interest in well-located vacant sections.

“Agents say vendors are holding off listing their properties for now. This will continue to put pressure on supply, so continued low levels of stock on the market is expected.”

Hawke’s Bay

House price growth accelerated across the Hawke’s Bay region as a whole last month, with the three-month rolling average increasing from 3.5% to 4.2%.

Despite lockdown, the monthly rate of house price growth also increased in August from 1.5% to 2.2% in Napier, where the average house value now sits at $844,371.

In neighbouring Hastings, the average house value increased 1.1% to $833,643, up from 0.7% the month before.

QV valuer Damian Hall says lockdown has had little impact on the market so far, besides the obvious reduction in numbers to open homes and, to a lesser extent, auctions.

“It may be too soon to see the direct impact.

“If the country is able to get back to normal sooner rather than later, the market is expected to pick up during spring.

“For now though, the biggest concern for buyers in the market seems to be the lack of property listings and the prospect of rising interest rates.”

Palmerston North

House price growth continues to taper off in Palmerston North, where the average house value increased by 1.2% in August to $742,336.

It marks the fourth month in a row that QV’s House Price Index has recorded a decline in the city’s monthly rate of house price growth − though prices remain a resounding 37.3% higher on average than the same time last year.

QV property consultant Olivia Roberts says high demand and low supply continued to drive house price growth right up until lockdown.

“The impact on the property market is yet to be seen.

“A number of vendors who would have planned to list their properties for sale in spring will now either defer until after lockdown restrictions ease completely, or vendors with no real urgency to sell will likely take a wait-and-see approach.”


House prices continued to cool across the greater Wellington region in August, before level four lockdown froze almost everything completely.

The average house price increased by just 0.7% to $1,037,127 in August, which is a far cry from the region’s April peak of 4.5% growth in a single month.

In fact, the region’s latest three-monthly average rate of house price growth was 4%, trending down from the 4.7% in July.

The largest capital gains this quarter were in Porirua, where house prices increased by an average of 5.1%, followed by Upper Hutt (4.5%) and Wellington city (4.4%).

QV senior consultant David Cornford says lockdown will likely have little-to-no impact on property values in the Wellington region.

“There was a slowing of value growth prior to lockdown that is likely to continue in the months ahead,” he says.

“The lockdown has given people plenty of time to browse real estate listings and consider their next property move.

“At level two, there is likely to be a fair bit of activity in the market, but interest rate rises are still on the horizon, as is a potential tightening of lending criteria – both of which will likely dampen value growth.

“We may see a bit of a spike in stock as the region works its way down the Covid-alert levels. However, stock is likely to continue to be constrained overall and demand is expected to hold firm,” he says.


Nelson house prices rebounded in August, rising 2.7% (up from 1.1% in July) following four months of declining growth.

QV senior property consultant Craig Russell says supply constraints were a major issue in the region as it headed into lockdown with the number of properties available for sale steadily falling over a number of months.


The Canterbury residential market entered lockdown with some upward momentum.

Within Christchurch City, the latest QV House Price Index shows a reduction in three-monthly value growth, from 6.3% to 5.8%, with the average value now sitting at $676,727.

This represents an annual growth rate of 29%.

Values continue to rise in the neighbouring Waimakariri District, where the average house price has increased 9.4% over the past three-month period to $609,112.

The Selwyn District followed a similar pattern; its three-monthly rate of value growth increased from 7.7% at the end of July to 9.1% at the end of August, with an average home value of $736,316.

Local QV property consultant Olivia Brownie says the new-build market continues to appeal to investors and first-home buyers due to government regulation and reduced supply, which in turn is providing demand for house-and-land packages and a significant increase in land values within the Canterbury region.

“This is most evident in the continuous value increases in the outer areas of the Waimakariri and Selwyn Districts, as well as southwest Christchurch, where a lot of the new-build activity is underway.

“Leading into spring activity in the property market is expected to pick up,” she added.


House prices increased at a rate of 1.2% in Dunedin during August, before the lockdown.

QV area manager Tim Gibson says demand was high for land and residential property that “ticked all the right boxes” when the region entered lockdown. Now he expects that trend to continue as the alert levels drop.

“Coming out of the first lockdown last year, there was stagnated value growth due to uncertainty after a sustained period of growth prior.

“It didn’t take long for normal market conditions to reappear with well-documented value growth occurring from that point,” he says.

“This time around, it is anticipated the Dunedin market will continue on much as it was prior to the recent lockdown.”

The average home value in Dunedin is $685,167, which is 22.1% higher than the same time last year.


Queenstown’s residential property market is subject to a great deal of uncertainty, as evidenced by a small 0.7% drop in the average house price in August.

This small fall follows the sharp 3.5% rise in July, with QV’s three-month rolling average recording growth of 2.9% overall at the end of August.

The average value of a residential property in Queenstown now stands at $1,425,821.

Local QV property consultant Greg Simpson says the recent lockdown is likely to have a generally negative effect on the local economy for possibly the short-to-medium term.

“The property market conditions will be subject to uncertainty as a result.

“Once the Covid outbreak has settled down, homeowners should expect to see a series of OCR hikes that could add up to 2.5% to mortgage interest rates,” he says.


Invercargill’s average house value increased by 3.5% this quarter – including a 1.4% rise in the month of August alone – to $455,845.

Local QV property consultant Andrew Ronald says it was a slight increase on the 1.3% monthly and 3% quarterly house value growth reported in July.

“Favourable borrowing rates are still encouraging purchasers to the market, stimulating market activity,” he says.

“There is continued strong demand for most property types − although buyer inquiries and open home numbers are down compared to early 2021 and fewer properties are attracting multiple offers.

“There has been less investor activity over recent months, strong demand from first-home buyers and strong demand for building sites throughout the wider Invercargill area.”

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