House prices beginning to cool? QV figures show slow in growth

Source: 1News

Are house prices in Aotearoa beginning to level off? Quotable Value says its latest figures are showing the brakes applied to both the most expensive and affordable properties throughout the country. 

In a statement this morning, QV's quartile index recorded a 2.2 per cent reduction in value growth in the June quarter across the most expensive houses in New Zealand’s main centres – down from 8.5 per cent growth to 6.3 per cent.

Meanwhile, the country's least expensive houses experienced a slightly smaller 1.4 per cent drop in average value growth - from 8.3 per cent to 6.9 per cent. 

"It's worth reiterating that prices are still generally increasing, but they're just not going up by nearly as much as they were before," QV general manager David Nagel said.

"While demand remains high and supply remains low, house prices are generally only going to go in one direction and that's up. How much higher will likely depend on how much higher interest rates will go.

"By spring, we should have a clearer picture of what the market is doing and whether or not this cooling effect on prices is here to stay."

Nagel added that the easing is likely the effect of Government's intervention and a tightening of credit availability with the return of LVRs, as well as the increasing likelihood of interest rate rises in the near future.

"Not to mention the seasonal downturn that normally accompanies these cooler months," he said.

Property prices have risen highest this quarter across the first-home buyer's segment in Upper Hutt (12.7 per cent), Whangārei (11.6 per cent) and Papakura (10.7 per cent), and across the upper quartile in Franklin (10.9 per cent), central Wellington (10.6 per cent), and Hastings (9.8 per cent). 

The biggest decline in the rate of house price growth, and the only major urban centre to show any sort of quarterly decline in house value since winter last year, was in the upper quartile in Marlborough, which dropped just -0.1 per cent to $1,032,839. 

Nagel cautioned there could be similarly small value drops next month across Napier and Queenstown’s upper quartile, where average house price growth has been largely static or slightly down in consecutive months.

"Though the drop in Marlborough is almost immaterial, it is statistically significant when you look back at almost 12 months of solid growth across all of the 16 major urban centres we monitor," he said.