Wednesday 2nd August 2017
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New Zealand property values rose at their slowest annual pace in more than two years as a slump in Auckland sales has seen the country's biggest housing market flatline after several years of rapid price gains.
The QV house price index rose 6.4 percent in the year through July, the slowest annual rate since February 2015 and slowing from an annual increase of 8.1 percent in June, state-owned valuer Quotable Value said. Values increased 1.6 percent to $641,280 in the three months ended July 31.
That slowdown was again led by a cooling Auckland property market, where values rose just 5.3 percent in the year, the smallest annual increase since May 2012, and flatlined on a rolling-three monthly basis for a second straight month at $1.04 million.
"Much of the slowdown in the markets is being caused by high prices and banks' stricter lending criteria, meaning it's difficult for many buyers to raise finance to purchase and this is now constraining the market," QV national spokeswoman Andrea Rush said in a statement. "It's likely that these trends will continue for the rest of the winter and many buyers and sellers are now taking a wait and see approach until after winter and the election."
New Zealand's property market has been cooling since banks introduced tighter lending conditions and started indicating interest rates would start rising, while at the same time the Reserve Bank's curbs on riskier mortgage loans excluded many first-home buyers who struggled to cobble together a big enough deposit on what have increasingly expensive houses.
Auckland valuer James Steele said the city's residential market was still cooling with sales volumes falling by almost a third and twice as many properties listed on the market.
"This is meaning properties are generally taking longer to sell and auction clearance rates also remain low, but auction rooms are still well attended, so it appears people remain very interested in what the market is doing," Steele said.
Hamilton and Tauranga were early beneficiaries of the early slowdown in Auckland as buyers, primarily investors, shifted their focus further afield. Hamilton property values rose 0.4 percent in the three months through Jul to $540,840 and were 5.4 percent higher than a year earlier. Tauranga values rose 1.9 percent to $691,350 on a three-monthly basis and increased 1.9 percent in the year.
Wellington property values increased 0.8 percent to $607,011 in the three months ended July 31 for a 16 percent annual gain, while Christchurch values dipped 0.2 percent to $495,098 in the rolling three-month period for an annual gain of just 0.6 percent.
Dunedin property values rose 0.6 percent to $373,857 on a three-monthly basis for an annual increase of 13 percent.
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