NZ property values rise at slower pace in January, QV says
NZ property values rise at slower pace in January, suggesting increased buyer caution, QV says
Feb. 10 (BusinessDesk) – New Zealand property values increased at a slower pace in January, suggesting restrictions on high debt lending and looming interest rate rises may have prompted buyer caution.
Values increased at a 9.6 percent annual pace in January, lagging December’s 10 percent rate, according to state valuer Quotable Value. Nationwide values increased 0.3 percent in January from December, when they increased 1.3 percent, the agency said.
The Reserve Bank introduced loan-to-value mortgage lending restrictions on Oct. 1 on concern rapidly accelerating house prices in Auckland and Christchurch may lead to an asset bubble and cause financial instability. The central bank is expected to start hiking interest rates from next month to cool the economy as inflation accelerates.
“Property value growth has slowed down in the first month of the year,” QV research director Jonno Ingerson said in the statement. “While this is the first month that values appear to have slowed, and generally we would wait for subsequent months before claiming a trend, the timing does align to the LVR speed limits.
“The predicted increase in mortgage interest rates in the near future are likely to also slow down values further,” Ingerson said. “This may in fact already be affecting buyer confidence and contributing to the slowing we are seeing.”
Values in Auckland increased at a 14.5 percent annual pace in January while Christchurch values rose 12 percent, compared with an 11.7 percent gain for main urban areas.
In provincial areas, values are variable with some experiencing growth, others remaining stable and in some cases a decline, QV said. Nationwide, prices are 12.8 percent above the previous market peak of late 2007, the agency said.