New Zealand house prices continue soft start to year with modest gains

NEW Zealand’s housing market continued its soft start to the year in February, with price gains slowing for a second straight month, according to CoreLogic NZ.

Values rose 0.3 per cent from January, when they climbed 0.4 per cent, the company said on Friday (Mar 1) in Wellington. From a year earlier, prices fell 1.4 per cent compared to a 2.7 per cent annual decline in the previous month.

While prices have climbed for five straight months, high mortgage rates continue to weigh on the market. The Reserve Bank of New Zealand this week held its official cash rate at 5.5 per cent and said it would need to stay there into 2025 to tame inflation.

“For new entrants to the housing market, there are still significant challenges in terms of saving the deposit and satisfying loan serviceability criteria,” said Kelvin Davidson, chief property economist at CoreLogic. “Investors are also facing challenges from high mortgage rates too, while even existing owner-occupiers looking to move up the ladder still need to assess their finances closely.”

The average house price rose to NZ$930,495 (S$762,106), CoreLogic said. Prices gained from a month earlier in all six of the nation’s biggest urban areas. BLOOMBERG