House prices fall in regions but lockdown may grant reprieve
A drop in listings because of lockdown could temporarily stop the housing market slowing, a property researcher says, as new data shows house prices falling in several centres.
House prices nationwide increased by 1.6 per cent over August, which left the average national price at $937,148, the latest CoreLogic House Price Index showed.
But this rate of price increase was down from July and continued the recent slowing trend where growth eased from a peak of 3.1 per cent in April, to 2.2 per cent in May, and then 1.8 per cent in June and July.
Quarterly price increases slowed in markets around most of the country. Auckland was the only one of the main centres where prices increased more quickly, at 5.7 per cent this quarter from 5.0 per cent in the quarter ending July.
Auckland’s rate of monthly price increase stayed at 5.2 per cent in August, the same as July, which left the region’s average price at $1,337,648. All the other main centres, bar one, showed signs of slowing markets, but retained quarterly growth rates of more than 4 per cent.
Hamilton was the exception, with prices dropping 0.5 per cent over the quarter and falling 2.8 per cent month-on-month. This left the region’s average price at $782,774 in August.
Some other main urban areas also recorded big declines in their rate of quarterly price growth. They included Queenstown (from
7.1 per cent to 3.4 per cent), Whanganui (8.3 per cent to 4.4 per cent) and Gisborne (1.4 per cent).
But it was Rotorua that had the most noticeable shift in momentum, with its prices dropping 2.8 per cent, compared to growth of 9.7 per cent in May. It meant the city’s average price fell back below
$650,000.
CoreLogic head of research Nick Goodall said the figures were further affirmation that the market was easing off, very slowly but firmly. ‘‘There has been around six months of slowing price growth now, so the market is transitioning towards a more sustainable rate of growth.’’
But, in the short-term, lockdown would affect the number of property listings coming on to the market because it was harder for agents to source leads and for sellers to prepare their property for sale, he said. ‘‘This further tightening of supply could lead to some temporary renewed upwards price pressure as pent-up demand competes for limited listings.’’
Any reacceleration of price increases that did occur was likely to be short-lived and would not be a repeat of the post-lockdown market boom seen last year, he said.
That was because the factors which helped drive the boom last year were not there this time. These included the official cash rate being dropped which made for record low mortgage rates and loan-to-value ratios (LVRs) being removed.