Tighter lending criteria is continuously constraining the New Zealand property market, despite short-term interest rate remaining low, says CoreLogic.
According to the latest QV House Price Index, none of the main centres saw property value growth more than 0.5% since May.
The report suggests Dunedin remained as NZ’s best performing with 9.2% increase in growth year-on-year and 3.2% rise in value growth in the three months ended in June. However, its rate of growth significantly slowed at 3% in May.
Auckland, Tauranga and Christchurch recorded drops in property value in the June results, all dropping 0.1%. Christchurch’s value results were also 0.3% down year-on-year.
Property values in Wellington were 1.3% down from the end of March, despite a slight recovery in June where values bounced back to 0.4%.The market weakness is spreading to Lower Hutt, where values increased only 0.6% since the end of March. Upper Hutt, meanwhile, sees more positive growth by 1.9% over the same time period.
“Reduced availability and credit unavailability appears to be limiting what buyers can pay in with an average property value hovering over $750,000,” CoreLogic said.
CoreLogic head of research Nick Goodall, meanwhile, noted: “There’s no doubt we’ve gone past the peak growth phase of the most recent property cycle.
“The question now turns to how long the lull will last and whether it will be more than a lull.
“Given we’ve seen no discernible change in investor behaviour, any improvement to supply will be a long-term game and mortgage interest rates are set to remain low, so we think any drop will be shallow for now,” he said.
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