Stalled house market defies doomsayers
Warnings that New Zealand’s property market was becoming a bubble destined to pop look to have been proved unfounded – for now, anyway.
Two years ago, Kiwis were being warned to brace for a sharp downturn in prices. But the latest Quotable Value (QV) house price index indicates that the market is righting itself by going nowhere for the time being.
In theory, that should boost affordability as incomes rise.
Nationwide, property values lifted 1.3 per cent over the three months to November. They were up 3.5 per cent over the year.
Auckland growth was positive – barely – for the first time in spring, with values rising 0.1 per cent. Across the city, the average value was $1.05 million for the November quarter.
CoreLogic head of research Nick Goodall said the city was continuing a long-term trend of having had no effective growth in two years.
Similar effects are being seen in other larger centres. Hamilton saw dips in value in November.
Within Wellington, growth slowed in November, but quarterly growth remained at 4 per cent for the region.
Dunedin remains the standout of the main centres, with annual value growth extending to 11.7 per cent at the end of November.
There remains no real change to property values in Christchurch and this is mostly true of the wider district too, with both Selwyn and Waimakariri continuing to experience only very minor annual growth of 1.3 per cent and 1.6 per cent respectively.
Goodall said tighter lending criteria had been a defining feature of the market in 2018.
From January, the Reserve Bank will allow banks to lend a little more of their new lending to borrowers with low deposits.
But Goodall said he did not expect to see a rush of buyers, as they still had to prove they could repay the loan. It was hard to picture a scenario where the market would experience a sharp reduction in prices, he said.