2017: Year of housing slowdown

Last year really was the year that New Zealand’s housing market slowed, new data from Quotable Value shows.

It has released its statistics for the full year, including December, which show the number of houses sold was down on 2016 every month, and more than 20 per cent down each month between February and October.

The nationwide average property value increased 6.6 per cent from $627,905 in December 2016 to

$669,565 in December 2017. That’s about half the rate of growth experienced the year before.

‘‘A slowdown in the rate of value growth in the housing market that began in the latter part of 2016, with the introduction of loan-to-value [LVR] speed limits requiring a 40 per cent deposit by investors, continued throughout

2017,’’ said QV spokeswoman Andrea Rush.

‘‘The frenzy … of the previous three years induced by high numbers of investors in the market subsided and we saw a return to more normal levels of activity in housing markets around the country.’’

By October, nationwide annual value growth had slowed to 3.9 per cent, the lowest rate of growth seen in five years.

For the Auckland region it slowed to -0.6 per cent, the slowest annual rate since March 2011.

‘‘High prices, constraints on finance caused by tightening in retail banks’ lending criteria, and higher deposit requirements removed many buyers from the market and sales volumes plummeted,’’ Rush said.

‘‘Potential housing policy changes in the lead-up to the election also caused uncertainty and people took a wait-and-see approach, causing activity to slow dramatically over the winter quarter and this resulted in value decreases in many areas.’’

She said the usual spring surge in the property market was slow to arrive and the number of listings and sales did not pick up until November and December.

‘‘The slight easing in LVR restrictions by the Reserve Bank due this month is likely to help improve activity and demand in housing the market as we move through the summer months.

‘‘Low interest rates, relatively high net migration and lack of supply means market drivers remain and we are likely to see values hold for the most part during 2018 in the main centres. But the trend of lower rates of growth is likely to continue.

‘‘However, areas where investors were previously very active may continue to see values drop back where prices remain too high for first-home buyers, particularly in Auckland, Hamilton and surrounding districts.’’

The fastest value growth in the year was in Napier, up 15.1 per cent to an average $477,959.

It was closely followed by Hastings and Nelson. Auckland’s average value barely moved in December compared with the same time the year before.

Dunedin was the fastestgrowing main centre, at 10.4 per cent price growth, just ahead of Wellington on 9.4 per cent.