Brakes put on house prices
Ratings agency Fitch has warned New Zealand and several other ‘‘hot’’ AsiaPacific countries are in for a sharp slowdown in house price growth this year.
The housing market was likely to ‘‘decelerate sharply’’ in several AsiaPacific (Apac) markets over 2017, as sheer affordability, increased housing supply and tighter lending and regulatory standards kicked in, the agency said.
Australia, New Zealand and China had had the region’s biggest recent price rises, but they would now experience a ‘‘pronounced and overdue slowdown’’.
‘‘We expect them to record single-digit house price growth, rather than the double-digit growth experienced last year.’’
New Zealand house prices, which grew 12.7 per cent nationally last year, were forecast to slow to 5 per cent, due affordability limits tighter regulation.
‘‘Measures of relative home price expensiveness have deteriorated more in New Zealand since 2010 than in any other country covered by our report,’’ Fitch said.
NZ also had the largest gap in house price growth between regions.
The good news was that Fitch still rated New Zealand’s economy and did not expected the housing slowdown to impact on it too greatly. It gave New Zealand a ‘ AA’ on its ‘‘issuer default rating’’, a measure of the country’s vulnerability to defaulting on its debts. to and
New Zealand’s mortgage holders are ‘‘vulnerable’’ if interest rates rise or the job market flounders.