New Zealand house-price decline slows, adding to signs of trough
NEW Zealand house prices posted their smallest monthly decline since January, adding to signs that an 18-month property market slump could be in its final stages.
Values fell 0.3 per cent in July from June, when they slumped 1.2 per cent, CoreLogic New Zealand said on Wednesday (Aug 2) in Wellington. From a year earlier, prices dropped 10.1 per cent – the slowest annual decline since February.
The moderating pace of price declines and the Reserve Bank’s signal that the Official Cash Rate is unlikely to rise any further are being seen as a fillip to the property market, which has dropped 13 per cent from its peak, according to CoreLogic. The agency reported that capital city Wellington had its first price gain in 17 months and values also rose in many parts of largest city Auckland.
“Market indicators started looking stronger in June and that positive momentum has continued in July,” said CoreLogic chief property economist Kelvin Davidson. “There are several key factors pointing to the trough for house prices, including a broad peak for mortgage rates. We’ve also seen a pick-up in the volume of sales while stock on the market is dropping, and this is likely starting to result in the re-emergence of competitive price pressures.”
Davidson said that a range of indicators were making it “increasingly clear that the trough for New Zealand’s house prices has essentially arrived”, and further evidence was likely to emerge in the next couple of months.
CoreLogic constructs its index on a rolling three-month basis using prices once settlement is agreed.
The average house price slid to NZ$907,509 (S$743,978) in July, the lowest since June 2021, according to CoreLogic data.
Auckland house prices fell 12.3 per cent from a year earlier, while Wellington values dropped 13.9 per cent. Prices in the South Island resort town of Queenstown fell 2.3 per cent from July last year, their first annual decline since November 2020. BLOOMBERG
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