New Zealand's gradually slowing property values have remained firm in July with the annual rate only increasing slightly.
Figures from CoreLogic QV House Price Index show a two per cent increase at the end of June to 2.2 per cent at the end of July.
The organisation's head of research Nick Goodall said the relatively neutral performance reflected the market which had been gradually slowing since the beginning of 2018.
However he also said it remains supported by low inventory and mortgage interest rates.
"While the economy is continuing to slow down and many forecasts are for this to continue, from a property perspective the outlook is slightly more optimistic. Net mitigation remains high, unemployment low and mortgage interest rates are forecasted to stay low for longer.
"Demand for property is constrained by the current credit environment, which retains strict scrutiny on potential borrowers’ income as well as expenses, and of course the [Reserve Bank of New Zealand] RBNZ mandated LVR restrictions ensure that most borrowers have at least a 20 per cent deposit," Mr Goodall said.
The bank is expected to cut the Official Cash Rate (OCR) to another record low of 1.25 per cent today.
However, in regions where inventory is tight, he said prices continued to rise - albeit at generally slower rates than in the past three years.
"As expected, growth in some of the regional areas are running out of steam after a strong growth phase for almost four years. Rotorua, Whanganui, Hastings, Napier, Queenstown and Gisborne have all seen property values increase by more than 60 per cent over that time."
Meanwhile, Mr Goodall said property values in Auckland continued to slip backwards (-2.6 per cent annual change), but added the recent decline (-2.9 per cent behind peak value in March 2018) should be put into a longer term context of 42 per cent total growth over the past 5 years.
"Unaffordability, as well as the removal of foreign buyers continues to impact the market in our largest, most expensive, city."
He said it was particularly true of Auckland's North Shore, where values are -4.3 per cent down in the past year, and -5.2 per cent down from the recent peak in February 2018.
"The average number of days to sell a property in Auckland has continued to lengthen over the last few years as an increase in inventory, and a reduction in demand favours potential buyers," Mr Goodall said.
SHARE ME