New Zealand's latest June house price report is out! Do the figures suggest the downturn is nearing an end?

According to the latest OneRoof Valocity House Price Index report, New Zealand's national average house price fell a further 2.3% (NZ$22,000) in the 3 months to the end of May, taking the average to NZ$950,000. Across the country, Northland, Otago and the West Coast stood out for growth in average house prices, with the West Coast recording the largest increase at +2.9%.

Notably, in some regions, including Canterbury, Taranaki and Wellington, the pace of house price declines has begun to slow, with prices even starting to stabilise.

However, the figures show that property market conditions are still deteriorating in many parts of New Zealand. Over the past 3 months, house price declines have accelerated in 8 regions. The Bay of Plenty, Hawke's Bay, Marlborough, Nelson and Southland have been hardest hit, and unemployment rates in these 5 regions have almost doubled.

Auckland's average house price fell 3.2% (NZ$43,000) over the quarter to NZ$1,291,000. The figures show that price declines in the region accelerated markedly in April and May, suggesting Auckland house prices may still have some way to go before reaching the bottom.

Of the country's 72 residential areas, only 14 recorded house price growth over the past three months. Prices in Dunedin and Queenstown rose +1.7% and +0.6% respectively, taking their averages to NZ$654,000 and NZ$1,918,000.

Chart of house price changes across New Zealand's regions over the past year

Chart of regional house price changes over the past 3 months

Valocity senior research analyst Wayne Shum said nationwide property sales in the 3 months to the end of May were down nearly 38% on the same period last year, and more than 50% below the corresponding period 5 years ago. The Reserve Bank of New Zealand raised the Official Cash Rate (OCR) to a high of 5.5% on 24 May, which could dampen demand for homes in the short term. However, he also noted that the central bank's statement that the OCR had peaked was very encouraging for first-home buyers.

Table of properties currently for sale across New Zealand's regional property markets

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OneRoof property editor Owen Vaughan said new listings nationwide in May fell 12% from the previous month and 21% year on year. Wellington recorded the largest annual decline in new listings, down 41%. By contrast, Auckland's property market had not cooled, with total listings in the region down just 4% year on year. He believed falling prices and sales volumes had left many sellers taking a wait-and-see approach throughout autumn. He believed potential buyers would only be drawn back into the market once prices stopped falling and began to rise.

However, he also said current market conditions were highly favourable for buyers: house prices had almost reached the bottom, and investors were no longer competing with them in the market. Interest rates had also peaked, making this potentially the best time to buy, particularly for those with smaller budgets.