New Zealand house prices fall for fifth month as economic woes weigh on market
NEW Zealand house prices fell for a fifth straight month in July as rising unemployment and a sluggish economy weighed on the market.
Values dropped 0.5 per cent from June, taking the total decline since February’s “mini-peak” to 2.5 per cent, CoreLogic New Zealand said on Thursday (Aug 1) in Wellington. Values remain about 16 per cent below the boom-time peak of NZ$982,918 (S$782,073) in January 2022, although they are still approximately 19 per cent higher than the pre-Covid level.
The data was based on CoreLogic’s new hedonic Home Value Index, which the firm said will reflect changes in the housing market sooner.
“In an environment where economic growth is subdued and unemployment rising – with a knock-on sentiment effect even for those that are employed – it’s logical to expect that the housing market would reflect this,” said Kelvin Davidson, CoreLogic NZ chief property economist. “The stock of listings available on the market remains at multi-year highs, giving credit-approved buyers the power when it comes to negotiating a deal and agreeing a price.”
Still, there’s been a noteworthy mood shift in recent weeks around the Official Cash Rate (OCR) and inflation, Davidson said.
The Reserve Bank held the OCR at 5.5 per cent last month but surprised markets by saying tight monetary policy may be curbing demand “more strongly than expected”. The central bank sounded more confident that inflation will return to its 1 to 3 per cent target band this year, fuelling bets that rate cuts could start within months.
“Mortgage rates themselves have already been drifting lower lately,” he said. BLOOMBERG
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