Shock! March house price index released! NZ$1,600,000 separates New Zealand’s most and least expensive areas!

CoreLogic’s latest New Zealand House Price Index shows that the average house value over the three months to March was NZ$845,000. Compared with February’s NZ$827,000, the March average was NZ$18,000 higher.

However, looking at the monthly increase, house price growth slowed in March from 7.6% in February to 7.2%, a decline of 0.4 percentage points. This suggests that New Zealand’s house price growth has begun to ease.

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Auckland’s growth slows

Christchurch overtakes Auckland with a 8.6% increase

The report shows that average house prices in Auckland continued to rise through March (1–March). Over the past three months, Auckland house prices increased by 6.7%, taking the median house price to NZ$1,219,183. 

In Wellington, the average house price rose by 8.6% to NZ$935,575. Christchurch prices increased by 6.7% to NZ$575,721, while Dunedin rose by 6.6% to NZ$620,990.

The figures show that Auckland’s most expensive housing area is its central eastern district, including suburbs such as St Heliers and Mission Bay. The average price there was NZ$1,807,348, up 7.9% over the past three months. 

Notably, average residential property prices across New Zealand increased by 16.1% over the 12 months to March.

The rankings show that Buller is currently New Zealand’s least expensive district for housing, with an average price of NZ$239,000, up 5.4% over the past three months.

Leading research firm warns: new tax policy could worsen rental market conditions

CoreLogic said in its report that, after a prolonged period of growth in New Zealand house values, the government’s recently announced tax policy was gradually influencing the residential market.

CoreLogic also noted that the government’s announcement of new tax measures last week had sparked debate over whether investors would pass the additional tax costs on to tenants through higher rents or leave the market altogether.

CoreLogic said: “The new tax policy could worsen rental market conditions, with investors potentially passing the additional tax burden on to tenants.”

CoreLogic said in the article: “Tenants’ incomes have the most direct influence on the rents they pay, and landlords generally cannot pass increased costs on to tenants. Currently low mortgage interest rates and the phased removal of interest deductibility will also soften the immediate impact on existing investors, limiting any substantial sell-off.”

Government: we will intervene if landlords raise rents sharply! 

The announcement sent ripples through the market. Among the housing measures announced by the government last week, removing interest deductibility became a hot topic in the industry. The new tax announcement would leave landlords paying thousands of dollars more in tax each year, prompting many investors to complain that the policy was unfair. It even sparked a petition calling on the government to withdraw the policy. Some landlords also warned the government that, if the new tax went ahead, they would pass the additional costs on to tenants.

Last week, New Zealand’s Minister of Finance said: “We will closely monitor the impact of the new tax policy on the rental market and take action if necessary. If tenants believe their rent is too high and does not reflect market rates, they can also apply to the Tenancy Tribunal for a rent reduction.” The minister also warned landlords: “Changes to the current interest deductibility rules will be phased in over four years, so landlords have no reasonable grounds to raise rents in any circumstances.”