Brakes put on house prices

Matamata Chronicle - - Out & About - CATHER­INE HAR­RIS

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.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.