Appreciation in home values across New Zealand has stalled and CoreLogic’s head of research doesn’t think that will change anytime soon
%20March%2022%2C%202017(2).jpg)
The latest QV house price index shows that there was no increase in home prices on a month-to-month basis in February, March or April and a 0.5% increase in May.
The trend is of a marked slowdown especially for cities in the north according to analysis from CoreLogic’s Jonno Ingerson.
He says that Auckland’s home values have dropped 0.7% since November, following 6 months of strong growth city-wide. There are some exceptions though with the northern area of Rodney gaining 4.5% since November while the central city, Manukau and Papakura were flat, and the North Shore and Waitakere were down 0.2%.
Ingerson also highlights Hamilton, which saw a 31.5% rise in home values in the year to July 2016 but this has slowed to zero in the last 6 months. Wellington gained 21.5% in 2016 but values have slowed to 7.4% over the past 6 months and Queenstown was up 32% in the year to November 2016 but has slowed to 1.2% since.
With new restrictions announced by the Reserve Bank of New Zealand almost a year ago which CoreLogic data shows resulted in an immediate impact on demand; rising mortgage rates; and uncertainty about the election; Ingerson says that there is usually a drop in values between 4 and 9 months after sales volumes drop significantly.
Ingerson believes that unlike previous tightening of lending restrictions by RBNZ, the slowdown is more widespread this time. That is likely to mean subdued appreciation in home values at least until after the election.
The trend is of a marked slowdown especially for cities in the north according to analysis from CoreLogic’s Jonno Ingerson.
He says that Auckland’s home values have dropped 0.7% since November, following 6 months of strong growth city-wide. There are some exceptions though with the northern area of Rodney gaining 4.5% since November while the central city, Manukau and Papakura were flat, and the North Shore and Waitakere were down 0.2%.
Ingerson also highlights Hamilton, which saw a 31.5% rise in home values in the year to July 2016 but this has slowed to zero in the last 6 months. Wellington gained 21.5% in 2016 but values have slowed to 7.4% over the past 6 months and Queenstown was up 32% in the year to November 2016 but has slowed to 1.2% since.
With new restrictions announced by the Reserve Bank of New Zealand almost a year ago which CoreLogic data shows resulted in an immediate impact on demand; rising mortgage rates; and uncertainty about the election; Ingerson says that there is usually a drop in values between 4 and 9 months after sales volumes drop significantly.
Ingerson believes that unlike previous tightening of lending restrictions by RBNZ, the slowdown is more widespread this time. That is likely to mean subdued appreciation in home values at least until after the election.
