Quotable Value’s (QV) house price index reported that New Zealand house prices fell 5.4% nationally over the September quarter to be down 9.2% this calendar year.
Losses were broad-based, with 15 out of 16 districts reporting falling values over the quarter:
Heavy house price falls across New Zealand.
QV General Manager, David Nagel, is pessimistic about the outlook for the housing market given the Reserve Bank’s aggressive interest rate hikes, which are a “sure-fire recipe for declining home values”:
“The Reserve Bank’s decision last week to raise the Official Cash Rate (OCR) by another 50 points all-but ensures that the path we’re on will continue for the foreseeable future. Interest rate rises, credit constraints, the increasing cost of living – it’s a sure-fire recipe for declining home values. Plus there’s still new houses coming onto the market up and down the country, putting further downward pressure on prices almost everywhere”…
“This will be worrying news for people looking to sell their homes, as well as those who purchased at the peak of the market now concerned about negative equity. The exceptional house price increases throughout 2020 and 2021 have impacted affordability and impeded access to the property market for most New Zealanders”…
Large volumes of listings are giving purchasers plenty of choice and negotiating power, but it certainly looks as though sellers may still be in for a rough ride yet
QV’s results echo those from the Real Estate Institute of New Zealand (REINZ), whose House Price Index recorded a 3.3% decline over the September quarter to be down 12.6% from their November 2021 peak.
CoreLogic’s New Zealand house price index also recorded a 4.1% decline over the September quarter – one of the largest falls on record since the Global Financial Crisis in 2008.
Given the Reserve Bank’s latest monetary policy statement indicated more aggressive rate hikes are likely:
Committee members agreed that monetary conditions needed to continue to tighten until they are confident there is sufficient restraint on spending to bring inflation back within its 1-3 percent per annum target range. The Committee remains resolute in achieving the Monetary Policy Remit.
New Zealand house prices are destined to continue falling.
After recording one of the world’s largest house price booms over the pandemic, New Zealand is destined to experience one of the biggest busts.
