Recording an average decline of 3.2% for the quarter, the average home value in the city was now $702,803, or 9.2% higher than at March 31 last year.
In a statement, registered valuer Rebecca Johnston said it was a far cry from the 5.3% rate of quarterly growth recorded over the last three months of the year.
"The lower end of the market has certainly regressed this year, as also highlighted by the number of first-home buyers that we’re seeing drop off at open homes and the reduction in offers on properties in this sector," she said.
"But what’s interesting is that the upper quartile of Dunedin’s residential property market is still maintaining its value, with well-presented properties even attracting a small amount of positive growth.
"This indicates that higher-value properties are not as impacted by the Credit Contract and Consumer Finance Act and growing interest rates, the way that the first-home buyers are," she said.
Nationally, the index had experienced its largest quarterly drop in more than a decade as the main centres took the brunt of the impact of rising interest rates and tightening bank credit.
The average home decreased in value by 0.6% nationally over the past three-month period to the end of March, down from the 2.3% rise in quarterly growth in February, with the national average value now sitting at $1,046,636. That represented an average annual increase of 18.3%, down from 22.9% annual growth last month.
Outside Dunedin, there was positive growth value growth throughout the rest of the region. Waitaki and Central Otago recorded average quarterly growth rates of 4.2% and 5.5% respectively.
Meanwhile, Queenstown-Lakes arrested a two-month slide with a 2.4% increase in home value growth. The average value of a residential property in the district was now $1,659,839, 21.2% higher than the same time a year ago.
In Invercargill, the average home value was still agonisingly short of crossing the $500,000 mark, sitting at $498,473. Average home values in the city increased by 2.4% over the first three months of the year, which was less than half the city’s rate of growth during the last three months of last year. Annually, values were 17.6% higher than last year.
Two of the top three fastest-growing provincial centres throughout the first three months of 2022 were in the South Island, including Westland (11.2%) and Buller (10.4%). Waimate was third in the South Island with 6.9% average home value growth this quarter.
QV general manager David Nagel said there remained a lot of international uncertainty with the Russia/Ukraine conflict looking set to continue for some time, business uncertainty on the pace of the economic recovery, and how those factors would affect inflation and interest rates.
While recent immigration applications were encouraging, the majority of those were already in New Zealand and new arrivals were not expected until later in the year.
There were also real concerns at the number of New Zealanders likely to be leaving the country, eroding housing development further.
A continued gradual decline in value levels for some of the locations that experienced the greatest value growth between 2020 and 2021 was likely, while the regions would likely continue to see a mix of stagnated growth over the coming 12 months, Mr Nagel said.
