House values rise at slowest annual pace in seven months in April, QV says
New Zealand property values increased at the slowest annual pace in seven months in April after interest rates increased.
House values rose at an 8.4 percent annual pace in April, the slowest annual pace since an 8.4 percent gain in September, according to state agency Quotable Value. Residential values rose 0.2 percent over the three months ended April 30.
New Zealand's central bank hiked interest rates for the first time since the Global Financial Crisis in March to head off inflation. Rates went up again last month and the bank has signalled further hikes are planned, raising mortgage costs. Last October, the bank also introduced loan-to-value limits on high-debt lending to cool the housing market on concern rapidly accelerating house prices in Auckland and Christchurch could lead to an asset price bubble and cause financial instability.
Values in Auckland increased at a 13.9 percent annual pace in April and were up 1.5 percent over the three-month period, QV said.
"Values are still increasing but at a slower rate than last year and some properties are taking a little longer to sell," said QV Auckland valuer Bruce Wiggins. "We have begun to see price reduction stickers appearing in some areas, which have been a rarity up until now.
"This could show that sellers are needing to realign their sale price expectations to the true market trends and the fact that market conditions are less competitive than they were prior to October last year when the LVR speed limits were introduced," Wiggins said.
Separately, first-home buyer numbers picked up in March, suggesting buyers may have found alternative ways to finance property, QV said, citing CoreLogic data.
In Wellington, house values rose at a 2.8 percent annual pace in April, while Christchurch values increased at a 7.9 percent annual pace.
Nationwide, values are 13 percent above the previous market peak of late 2007, QV said.