Mar­ket slow­ing, ANZ says

Central Leader - - OUT & ABOUT - SU­SAN ED­MUNDS

Cool­ing in the Auck­land prop­erty mar­ket is likely to be longer-lived this time, ANZ’s econ­o­mists say.

Since the new lend­ing re­stric­tions on prop­erty in­vestors were an­nounced in the mid­dle of the year, there has been a no­tice­able slow­down in turnover in Auck­land. In­vestors now need a 40 per cent de­posit to pur­chase rental prop­erty.

Price in­fla­tion has de­cel­er­ated from dou­ble dig­its around 5 per cent year-on-year in Auck­land, ac­cord­ing to MyValoc­ity, com­pared to more than 20 per cent in Tau­ranga and Hamil­ton. Some com­men­ta­tors have said the mar­ket slow­ing is just an­other blip. There were qui­eter pe­ri­ods when loan-to-value re­stric­tions were first in­tro­duced in 2013, and then when new rules were brought in specif­i­cally for Auck­land in­vestors in 2015. Each time, it re­cov­ered and took off again.

But ANZ’s econ­o­mists said there were rea­sons to be­lieve the slow­down this time was more likely to be last­ing. ‘‘ Now that should not be con­fused with us say­ing we are ex­pect­ing a cor­rec­tion or any­thing like that,’’ they said.

‘‘Val­u­a­tions are cer­tainly stretched and risks have in­creased, but out­right weak­ness is hard to en­vis­age when net mi­gra­tion flows sit at records, sup­ply is re­spond­ing only slowly, in­ter­est rates re­main his­tor­i­cally low and the un­der­ly­ing econ­omy is still per­form­ing well.’’

ANZ’s econ­o­mists be­lieve the slow­down in the mar­ket is likely to be lon­glast­ing.

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