Table of Contents
This page looks at aggregated sales prices. QV publish excellent data but seem unable to convert it to usable information so that is what I try to do. Hopefully you find excellent value here.
Actual Prices
To keep it simple, here is a chart of prices since 2018, the earliest QV allow me to use. I have asked for earlier data without success. It does not matter a lot because the only useful data is from 2016, ie the last time major changes were introduced to construction standards (4x2 treatment and minimum scaffolding)
Those changes make new houses a different product to older houses, yet the older houses are currently considered equal, so values rose across the board making earlier than 2016 comparisons meaningless. It will be interesting to see if improvements in construction/renovation eventually add value to houses with features such as double glazing - there is no data.
Sales prices rose during the bubble so it is best to ignore that period, looking through from 2020 to 2023. No surprise all regions have a rise in prices followed by a fall in 2022-23.
So house prices rise because sellers are greedy? Nope, see below.
Indexed Prices - Affordability
Prices rise because money devalues, making it cost more dollars to buy houses, but the same effort to earn the dollars. This chart could predict house prices into the future, subject to changes in construction, building more Townhouses and Apartments may change everything. Predicting Household Incomes; I’ve tried and failed badly, even forcasting the next year is OK for National but terrible regionally.
If you know my work on rentals, you would see this coming. Sales prices appear to rise with Household Incomes, and apart from changes to the makeup of houses (better insulation and builder safety and coming soon the type of house). As you can see in the New Zealand data (hover over the black line) prices were 7.7 times median household income in 2018 and also 7.4 now as Auckland is dropping, probably due to high density construction. In some regions the ratio has changed a little, local conditions in supply and demand appear to explain these changes, I can borrow from the Rental Prices page for those conditions. eg Wellington has reduced as supply went from undersupply to oversupply, while Tauranga is simply short of homes and getting worse.
Prices Indexed
This is where it becomes easier to understand the current market with a tweak of data presentation. I have indexed prices to a point where we can all understand, the bottom of the market after the bubble. This chart shows growth since the bottom after the bubble, I’ll call that July 2023, I use the actual month by region:
Notice how well the indexed NZ Household Income (The black dotted Line) follows the indexed NZ sales prices (the Solid Black line). If you ignore the low interest driven bubble it’s almost perfect! The second dip seems premature, but overtight OCR is likely driving this.
The same chart over recent months to show Detail:
This close-up has some interesting changes. A new trend started this year, Auckland has already fallen below the July bottom. RBNZ interest rate changes were late, as they usually are due the delays inherent in data collection. The market seems to have decided this in April 2024.
This resource will be updated monthly, so comments may become dated, because to update I don’t need to visit the page I can simply update the charts offline.