CoreLogic: Boom times won’t last

There is a housing market slowdown coming, but it is not here yet, new data show.

CoreLogic statistics show property values nationwide rose 3.1 per cent in April compared with 2.2 per cent and 2.6 per cent in March and February.

That took the annual growth rate to 18.4 per cent and lifted the average national value to $871,375.

All the main centres had annual increases of more than 15 per cent in the year to April.

The Wellington region led the way with annual growth of 23.7 per cent to an average value of $971,393. The Auckland region was up 15.6 per cent at $1.24 million.

But the biggest increases were in provincial areas where housing was typically cheaper. Gisborne, Kapiti Coast, Whanganui, Napier and Palmerston North all had annual value gains of more than 30 per cent.

Gisborne had the steepest rise at 33.3 per cent, to $579,361.

CoreLogic head of research Nick Goodall said the acceleration in monthly value increases might seem surprising given the Government’s

recently announced tax changes for property investors, but it would take another month or so for the data to reflect that.

He expected the changes to affect the market and slow value growth over the next few months.

‘‘Anecdotes throughout April were abundant – telling of quieter open homes, a greater share of auctions passing in and that a fear of overpaying had replaced the previous over-riding emotion plaguing buyers, which was of a fear of missing out,’’ Goodall said.

There was an 11 per cent drop in valuations in April compared with the average over the previous six months, indicating market activity was down, Goodall said. The drop was lower than many had speculated it would be.

Following the Government’s housing policy announcement in March, some commentators had suggested the changes could lead to landlords leaving the market.

However, Goodall said there was no evidence of a rush of owners putting their properties up for sale. CoreLogic’s pre-listing measure showed appraisals were down 6 per cent, while the total number of properties listed for sale on Trade Me Property dropped to 22,300 by the end of the month from 23,100 at the beginning of the month, he said.

He expected the market would slow down over the next few months, with gains tempered, because the profitability of investment property had been reduced.

This would give the Reserve Bank some time to assess whether it needed to limit interest-only loans or put a cap on high debt-toincome lending, Goodall said.

‘‘But the long-term appeal of property hasn’t really changed that much. People will continue to buy property for the long-term because they like it as an investment for their retirement,’’ he said.