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The housing market is continuing to steadily decline in value

Sophie Vaughan
Housing in Christchurch for sale  Sophie Vaughan

CoreLogic data shows the property market has continued to decrease throughout the month of March.

Average house values have gone down another 1.1%, and the research has shown over the past year, house price index is now down 10.5% or an equivalent $109,491. 

For the month, Christchurch has seen a fall of 1.4%, and the average housing value is now $735,926. Since March last year, the city has recorded a small decline in average values (-2.9%), which reflects its ideal housing starting point.  

To compare, Wellington is down 1.2% this month, and down 20% from last year to an average value of $902,809. Auckland is down 1% in March and has fallen from last year 13.1% to have an average house value of $1,321,661. 

CoreLogic NZ Chief Property Economist, Kelvin Davidson, has reiterated that the falls are in context of the 43% surge between March 2020 and March 2022, and has indicated that prices are still currently around 30% higher than pre-Covid. 

“Mortgage availability also remains restricted and neither buyers nor sellers are in much rush, meaning market activity is low. These factors make it easy to see why property values are continuing to drop.” 

In the future, Davidson says there are still significant near-term challenges in the market, which includes the mortgage repricing decision and a possible recession.  

“The housing market ‘mood’ is pretty subdued at present, with both buyers and sellers having become accepting of tough fundamentals and lower prices.

"However, the first marker for this downturn coming towards its conclusion – a mortgage rates peak – now seems to have been reached.

“It’s a bit chicken-and-egg, but the current negative mindset could also shift quickly alongside those other key drivers, adding to the light at the end of the tunnel for late 2023.” 


“The housing market ‘mood’ is pretty subdued at present, with both buyers and sellers having become accepting of tough fundamentals and lower prices."

University of Canterbury Professor and Head of Department of Economics and Finance, Dr Jędrzej Białkowski said a small decline is generally considered preferable to a large decline, as it can help to maintain stability, and small declines can help to prevent a sudden shock to the market. 

“Those looking to enter the market will benefit from it as they have more negotiating power. On the other hand, for homeowners or investors who own property is “unrealized” losses in equity. The main loser will be those who have to sell their property and move out of the housing market. They will face financial lost.” 

He said the rule of thumb to see how much you can afford to spend on housing is 30% of your gross income. Assuming that the median house price in Christchurch is $700k, households with the income more than 120K can afford to buy a house in Christchurch, meaning Christchurch is more affordable for middle class families and this can encourage people to move to Christchurch. 

“It is difficult to predict the future of the market. From one side a significant economic downturn or higher interest rates will make it difficult for buyers to afford homes. On other hand the stock of attractive house may be higher, and it will give buyers better negotiation position.”