According to the latest QV House Price Index (HPI), even though there has been an average drop of 12.6% in the past year and a 2.7% decline this quarter.
But home values are still, on average, 24.5% higher nationwide than when the pandemic began three years ago which is massive!!
A QV spokesperson suggests that if the current rate of falling residential property values persists, it may take up to two years to return to pre-pandemic levels. Nevertheless, and very important to note, the market is expected to stabilize before then.
The pandemic has transformed the housing market significantly. Of the major centers, Wellington has experienced the most significant downturn in the residential property market among the major urban centers (average drop of 21% since February last year). However, the value is still 14.7% higher than when the pandemic began. Hastings was one of the five main urban centers with the largest home value declines in the past three months with -3.1%..
The Reserve Bank's recent increase in the Official Cash Rate (OCR) is expected to maintain the current downward trajectory of the residential property market.
Rising interest rates and credit constraints have significantly impacted the market, making it challenging for prospective home buyers to purchase a property, and many are waiting for the market to bottom out.
However, deciding when to buy a home should not be based only on where interest rates or property values currently sit as they will always fluctuate. Finding the a home that suits you and your family is an important factor to consider.
Contact MortgageMe here or below for expert home loan advice.