New data shows for the third consecutive month quarterly house price growth in New Zealand has eased.
The latest QV House Price Index figures show that for the three-month period ending in July, the average value of a home in New Zealand increased 4.3 percent, down from the 6.6 percent quarterly growth recorded to the end of June.
"Three-monthly value growth has more than halved since April when it was rocketing along at 8.9 percent," said QV general manager David Nagel.
"After three consecutive reductions, the market is clearly cooling now as a result of Government and Reserve Bank policy initiatives aimed at dampening the enthusiasm of investors. With looming interest rate rises, we’ll likely see a continuation of this trend."
The Government made a number of housing announcements in March aimed at tilting the market away from investors and towards first home buyers. That included extending the brightline test from five to 10 years, and removing interest deductibility for investor properties. The Reserve Bank also earlier this year began tightening loan-to-value ratio restrictions.
On QV's figures, the national average value of a house is now $952,078, an increase of 26.4 percent year-on-year, which is up slightly from the 25.6 percent annual growth reported last month.
All 16 major urban centres monitored by QV saw a reduction in three-monthly growth compared to June. The largest increase in value was recorded in Palmerston North, which saw prices jump 6.7 percent over the last quarter (down from 8.5 percent growth in the three months to June), followed by 6.3 percent growth in Christchurch, down from 8.3 percent.
In Auckland, where the average value sits at $1,352,577, prices have grown 3.5 percent over the last three months, with annual growth of 23.7 percent. Wellington has an average value of $1,029,922, which is up 4.7 percent.
While all urban centres saw an increase in average value, prices flattened in Marlborough with just 0.2 percent growth, down from 4.4 percent recorded to the end of June.
The QV figures show values in the Manawatu-Whanganui region have grown 38.1 percent over the last year, while the greater Wellington and Hawke's Bay regions have seen year-on-year jumps of 34.3 percent and 31.8 percent.
The three lowest annual growth rates are all in the South Island, but they're still significant jumps. Southland increased 19.4 percent, Otago grew 21.6 percent and Tasman saw 22.9 percent annual growth.
"The fundamentals of the property market are still strong, so we’re unlikely to see a wholesale reduction of values anytime soon, but we may begin to see quarterly value growth taper off in some localities altogether, and even some small reductions as we come to the end of the current growth cycle," Nagel said.
"But while interest rates are still low and listings remain in short supply, it’s more likely we’ll likely see a continued slowing in the rate of price increases over the coming months as the property market continues to absorb the recent change."