Brakes go on housing for first time in 15 months

The housing market is slowing.

House price index figures released by Quotable Value today show annual house price growth slipped from 22 per cent for the year ending June to 16 per cent for the 12 months to September.

The year ending September marked the first fall in annual house price growth below 20 per cent since June last year.

Quotable Value spokesman Blue Hancock said increased interest rates and income levels not keeping pace with house prices had contributed to decreased buyer demand.

House price growth for the September quarter stood at 2.4 per cent, unchanged from the June quarter.

"If the trend of the last six months continues, the annual growth rate will likely fall beneath 10 per cent over the coming two quarters," Mr Hancock said.

Most urban areas experienced minimal quarterly growth. North Shore grew 0.9 per cent, Auckland City 1.8 per cent, Manukau 1.5 per cent, Tauranga 2.4 per cent, Wellington 0.9 per cent, Christchurch 2.7 per cent and Invercargill 0.7 per cent.

Hamilton and Dunedin were the exceptions, with 4.2 per cent and 4 per cent growth respectively.

Nelson was the only area to experience a quarterly decline, of minus 1.4 per cent.

Nelson's annual house price growth fell sharply from 43 per cent for the year ended September 2003 to 4.3 per cent for the year ended September 2004.

Growth was more than 20 per cent in Dunedin (25 per cent), Tauranga (22.4 per cent), Napier (22.1 per cent), and Christchurch (20.4 per cent).

In the year to June, Dunedin and Napier exceeded 30 per cent growth. Five other urban areas exceeded 20 per cent.