House Price Index drops in value for first time since August 2020 lockdown

WELLINGTON: The downturn in the housing market is spreading beyond the major centres, as affordability and rising interest rates drive more buyers out of the market.

CoreLogic’s House Price Index (HPI), a national measure of housing prices, fell 0.8% in April, which was the first drop since values dropped 0.2% in the August 2020 Covidlockdown.

The property research firm said there was a 1.6% drop in Auckland values and a 1.5% drop in Wellington, including a bigger 3.0% fall in Lower Hutt.

There had also been a 2.9% fall in Dunedin values over the past three months, which was the greatest quarterly decline more than 13 years.

‘‘Outside the main cities there appears to be particular weakness across the Manawatu/ Whanganui and Hawke’s Bay regions, with the Hastings market falling 2.4%, Whanganui down 2.3% and Palmerston North decreasing by 1.5% in April,’’ in

CoreLogic head of research Nick Goodall said.

Christchurch was the only main centre to show any resistance from the weakening market.

‘‘Affordability remains a key constraint on the market as increasing interest rates impact the number of eligible borrowers and the amount they can borrow.

‘‘This is on top of tighter credit availability by way of greater scrutiny on borrower expenses through the CCCFA (Credit Contracts and Consumer Finance Act) changes as well as tighter loantovalue ratio (LVR) restrictions continuing to bite.’’

Mr Goodall said proposed changes to the CCCFA had provided some respite for wouldbe borrowers, but had not boosted bank lending.

The latest data from the Reserve Bank (RBNZ) showed banks were staying well below their allowed speed limits on high LVR lending, he said.

Although the Reserve Bank had deferred the introduction of proposed debt to income (DTI) restrictions, it remained a concern for some home owners.

In the meantime, the slowdown in the market appeared to be entrenched, although Mr Goodall expected values would decline gradually as long as the labour market remained tight. — RNZ

PHOTO: STEPHEN JAQUIERY From Tolaga Bay to the moon . . . Leo Edginton with his six dogs that he qualified for this week’s South Island sheep dog trial championships.