There are growing signs that the soaring cost of houses in New Zealand has finally reached its peak, according to valuation and property services company Quotable Value.
Their research shows that the annual growth rate for the average New Zealand house dropped by nearly 4 per cent between January and February.
The national average value of a residential property in New Zealand is now $1.053 million.
In the Auckland region, the average value is $1.519 million, with annual growth dropping 4.4 per cent between January and February.
And it’s not just in Aotearoa's biggest city. All 16 of the major urban areas QV monitors have shown a reduction in the rate of three-monthly value growth from the January data.
“There are less buyers out there now with the tightened credit rules and rising interest rates taking a number of first-home buyers and investors out of the market altogether,” says QV General Manager, David Nagel.
“Increased listings from both new builds and existing homes are providing the dwindling buyer pool with ample choice and this is putting downward pressure on prices.”
Nagel says that so far this year, it is taking longer to sell houses, with fewer people at open homes and the number of homes being sold at auction also dropping.
“While part of this may be attributed to Covid-19, primarily we’re seeing a residential property market that has peaked and is searching for the new equilibrium.”
Looking to the future, factors like the war in Ukraine, an expected exodus of Kiwis overseas and ongoing economic uncertainty over Covid-19 are expected to have an impact on the housing market.
“We’ll likely see a continued gradual decline in the rate of home value growth with a correction in some locations that have experienced hyper-value growth throughout the past 12 months,” says Nagel.
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