Central Otago is one of 16 districts around New Zealand with net positive home value growth (of 1.5 per cent) for the year so far, according to the latest QV house price index.

QV chief operating officer David Nagel said the primary cause may be that Central’s upper quartile homes (the 25 per cent most expensive homes) have gone up in value by 13.2 per cent in 2022, dragging the average up.

The latest QV house price index shows homes decreased in value by 2.9 per cent nationally over the three months to the end of November. 

This is a slight improvement on the 3.9 per cent quarterly reduction reported at the end of October – with the average house value now sitting at $945,568.

For Central, however, values fell further this quarter generally on average (-4.6 per cent) than they did nationally.

QV House Price Index November 2022

Values fell an average of 2.6 per cent locally in the last six months, better than the national average (-8.2 per cent).

The current average home value in Central Otago is $769,137.

The list of provinces showing net positive home value growth is decreasing. At the end of October there were 21 districts, which has dropped to 16, with December figures still to come. 

Westland (7.9 per cent) and Mackenzie (6.7 per cent), Kawerau (5.9 per cent), Timaru (4.9 per cent) and Ashburton (4.8 per cent) are the top five provincial centres.

Queenstown (5.4 per cent) is the only urban centre to show any positive home value growth this calendar year.  

David Nagel said it’s been a crazy couple of years in real estate with massive growth followed by a pretty significant correction. 

“The last time we saw anything similar to this was after the GFC in 2008, but that was an entirely different kettle of fish to what we’re going through right now.

“For one thing, the market was behaving in a generally orderly fashion until that point, with gradual, sustainable growth – whereas the growth we saw during the first two years of the Covid-19 pandemic was far from gradual and sustainable.

“Home values increased by nearly 30 per cent nationally in 2021. In 2022, they’ve fallen by less than half that much on average, so there’s clearly still some way to go until we’re back at pre-pandemic levels.

“Fortunately, our economy hasn’t taken a hit like it did in 2008…rising interest rates combined with an increase in the cost of living are going to continue to make life tough for many of us – especially the highly leveraged and those who purchased at the peak of the market.”

Lower quartile homes (the 25 per cent cheapest houses) have fallen -0.3 per cent. These are the homes most likely targeted by first-home buyers and investors.

However, Tall Poppy business owner Peter Hishon said he believed the region was insulated from some market conditions due to being a preferred lifestyle area of New Zealand.

“People are moving to Wānaka, Queenstown, Cromwell, Arrowtown, Central and Lakes for that reason… They want to live beside the bike trails and work from home.”

The trend of people moving from Dunedin, Invercargill and Southland to retire in Central was continuing, he said.

“They are buying and selling in the same market, so it’s all relative.”