NZ property values rise at slowest annual pace in 14 months
By Suze Metherell
Sept. 4 (BusinessDesk) - New Zealand property values rose at the slowest annual pace in 14 months in August as restrictions on low-equity home loans, rising interest rates and uncertainty around this month's general election weighed on the housing market.
Property values nationwide rose 6.9 percent in August from a year earlier, slowing from a 7.6 percent annual pace in July, according to state-owned valuer Quotable Value. Housing values are now some 16 percent above the previous market peak in 2007.
QV's figures come ahead of the Reserve Bank's quarterly monetary policy statement, where Governor Graeme Wheeler is largely expected to keep interest rates on hold, after hiking them 100 basis points, to 3.5 percent, since March, in a bid to take steam out of an over-heating property market in Christchurch and Auckland.
In July, Wheeler said house price inflation had moderated since the June monetary policy statement. Barfoot & Thompson figures this week showed Auckland house sales declined for a third month in August, adding to a nationwide drop since the Reserve Bank placed restrictions on mortgages where the borrowers had a deposit of less than 20 percent of the home's price in October last year.
"Since September last year the growth rate of New Zealand residential property values has been slowing and this trend has continued over the past month," said QV national spokesperson Andrea Rush. "Sales volumes and home loan approvals are down year on year and interest rate rises, LVR restrictions and the upcoming election appear to be keeping the number of homes on the market low as well."
Property values rose 1.7 percent in the three months ended Aug. 31, slowing from a 2.3 percent pace in the three months ended July 31, and a 2.1 percent pace in the June quarter.
QV said Auckland property values rose 1.8 percent in the three months ended August, slowing from a 2.1 percent three-month pace in July, and were up 11.4 percent year-on-year.
Values in Wellington fell 0.5 percent over the past three month period, and rose 0.9 percent annually, while Christchuch city values increased 1.1 percent over the past three months, and were up 5.9 percent from a year earlier.