NZ property values rise at the slowest pace in two years in May
New Zealand property values increased at the slowest pace in two years in May, with the steam starting to come out of Auckland's heated housing market, according to state-owned valuer Quotable Value.
The QV house price index showed the nationwide average property value increased 9.7 percent in May compared with the year earlier, the slowest annual pace in two years. When adjusted for inflation, the annual increase was 7.4 percent.
New Zealand's bubbling property market is beginning to cool as tighter credit conditions and restrictions on riskier mortgage lending has dented demand. The cost and lack of housing is shaping up to be a key issue ahead of the September election. In Auckland, the country's largest city where surging values have made housing unaffordable for many, regional house values rose 9.3 percent to an average $1.04 million, the slowest annual rate since November 2014.
"Nationwide value growth continues to ease back due to lower demand in the housing market caused by the latest round of LVR restrictions and tougher lending criteria from the banks as we head into the winter period," said QV national spokesperson Andrea Rush. "Sales volumes are lower than they were this time last year particularly in Auckland and it's possible market activity may now remain more subdued until after the election."
Value growth continued to be stronger in Wellington and Dunedin than in other main centres, but was also starting to ease back a little, QV said.
In the Wellington region, property values surged 20 percent to an average $607,907, while in Dunedin values jumped 16 percent to $373,810. Elsewhere, Tauranga values rose 15 percent to an average $683,012, Hamilton advanced 12 percent to $537,152,and Rotorua increased 24 percent to $394,408.
New Plymouth advanced 9.7 percent to $420,080, Napier jumped 19 percent to $436,454, Hastings surged 22 percent to $413,801, Palmerston North rose 14 percent to $357,248, Nelson jumped 16 percent to $527,974, Christchurch edged up 1 percent to $495,070, Queenstown Lakes District increased 20 percent to $1.05 million, and Invercargill increased 11 percent to $243,144.