This article is from the Australian Property Journal archive
RESIDENTIAL property prices in New Zealand fell 8.9% in January, according to QV.
However, QV’s February statistics show residential property values grew 7.7% over the past year.
The average New Zealand sale price increased to $NZ393,240 this month from $NZ390,636 last month.
QV’s spokesperson Blue Hancock said the property market is fairly subdued despite most areas in the country still experiencing good ‘year on year’ growth in property values, but the rate of this growth is slowing rapidly.
“Banks have lifted their mortgage rates, properties are staying on the market for longer, and the volume of sales is really dropping.
“There are less active buyers and sellers in the market, with those keen to sell having to accept lower offers.
“Clearly the market is slowing down and taking a breather, and we expect this will continue given the current market conditions. It looks like we may be in for a sustained period of less activity in the property market,” Hancock said.
According to QV, annual growth rates continue to decline in all of the main urban centres. Hamilton recorded the greatest easing in property value growth dropping from 8.3% last month to 6.1%.
Wellington City decreased from 10.6% to 9.2%, Christchurch from 6.9% to 6.1% and Dunedin from 6.1% to 5.3%. Auckland City eased to 7.2% (last month 7.9%) and Tauranga slowed to 2.9% (from 3.4% last month).
A similar pattern of slowing growth rates was also recorded for the main provincial centres. Whangarei 7.3%, Gisborne 5.4% and Taupo 0.1% all slowed. Wanganui decreased to 5.0%, New Plymouth to 3.9% and Palmerston North dropped marginally to 7.1%. Queenstown’s growth rate continues to slow, down further to 5.2%.
JPMorgan economist Jarrod Kerr said the deterioration in New Zealand’s housing market was acknowledged in last week’s monetary policy statement from the RBNZ, with the central bank incorporating a 5% decline in house prices this year in their forecasts.
JPMorgan also expects a decline of 5% this year, but the downside risks to that forecast are growing by the week. The follow-on impact of a deteriorating housing market on consumption growth and residential investment are obvious, and point to weakening GDP growth this year and next.
Australian Property Journal
