House prices in New Zealand are still showing some variation between regions, although there is a relative stability across the nation as a whole. Through 2010, house prices nationally dropped gradually. However, the first few months of 2011 saw a slight recovery in some areas – particularly in the two main cities of Auckland and Wellington. The small rise in median prices in these two cities was able to partially offset the continued decline in house prices throughout the rest of the country. However, median house prices in Auckland and Wellington are still lower than they were a year ago – with Auckland homes down 1 per cent and Wellington homes down 2.9 per cent.
Some suburbs in Auckland are doing better than other suburbs. Typically, character houses that are close to the city center and in popular school zones are attractive some interest from buyers with access to low interest rates.
More volatility is expected in the national house sale market over the next few months, due in part to the Christchurch earthquake. In that city, quality homes in areas not affected by the earthquake are still appealing interest from buyers and there is also a demand for vacant sections around the area.
Other main centers are showing lower median house prices than at this time last year, with Hamilton down 3.8 per cent, Rotorua down 4.2 per cent and Tauranga down 2.4 per cent. Napier and Hastings have seen a smaller drop, with a decrease of only 1.5 per cent in the year. In the South Island, Nelson has a strong market for house prices which have stayed the same as they were for this time last year. Dunedin house prices have dropped 3.8 per cent in 12 months.
Some commentators say house prices are not expected to increase significantly in the short term, so first home buyers are not rushing into the market. Other commentators say that recent house sales in Auckland suggest buyers believe the market is at the bottom of the price cycle – at least in that city. With the probability of a rebounding economy over the next 12 months and low interest rates, more house sales are expected over this year in Auckland.
Real estate experts say that, despite the statistics, many homes for sale in New Zealand are not presented as well as they should be and many prices are still not reflecting the market. Many sellers are holding out for prices that represent what the house used to be worth, or what the owner paid for it. Neverheless, many of the higher value properties around the country continue to attract several interested parties and sell for the price expected.