NZ property value increases keep slowing in June on slumped sales
New Zealand property values rose at their slowest annual pace in more than two years last month as a clampdown on lending criteria led to a slump in Auckland sales, which have been a primary driver of the national market in recent years.
The QV House Price Index rose 8.1 percent in the year ended June 30, slowing from a 9.7 percent pace in May, state-owned valuer Quotable Value said in a statement. The annual increase was the smallest since March 2015, extending the slowdown into the traditionally quiet winter months. Values increased 3.2 percent in the three months ended June 30 to $639,051.
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 has been a major cause for concern as an expanding population and shortage of new housing led to an imbalance between supply and demand, pushing up prices. Property values were flat in the three months ended June 30 at $1.05 million across the region, for an annual increase of 7.2 percent, the smallest in almost five years.
"Sales volumes in the Super City have plummeted to 30 percent lower than they were this time last year as high prices coupled with banks' stricter lending criteria are making it increasingly difficult for anyone but cash buyers or those with higher levels of equity to buy property," QV spokeswoman Andrea Rush said. "It has also become much more difficult for developers to gain finance to build new homes, which is now leading to a slowdown in building activity in the market."
Hamilton and Tauranga were beneficiaries of the early slowdown in Auckland as buyers, primarily investors, shifted their focus further afield. Hamilton property values rose 1.2 percent to $539,357 in the three months through June and were 9.5 percent higher than a year earlier, while Tauranga values increased 1.6 percent on a rolling three-month basis to $687,364 for a 15 percent annual gain.
Wellington property values rose 2.4 percent to $609,552 in the three months ended June 30 for an annual gain of 18 percent while Christchurch values slipped 0.1 percent to $496,378 over the three-month period and were up 1.1 percent from a year earlier.
Dunedin property values rose 3.2 to $375,371 in the three months ended June 30 and climbed 15 percent from a year earlier.