New Zealand property values rose at the slowest annual pace in 13 months in July as rising interest rates, restrictions on low-equity home loans and the onset of winter took the heat out of the housing market.
Property values nationwide rose 7.6 percent in July from a year earlier, slowing from an 8 percent annual pace in June, according to state-owned valuer Quotable Value. That was the slowest annual increase since June last year. Sales volumes were between 15 percent and 25 percent lower than the same periods in 2012 and 2013, QV said.
Barfoot & Thompson figures this week showed Auckland house sales fell for a second month in July, adding to a national decline since the Reserve Bank of New Zealand imposed restrictions on mortgages where the buyers had a deposit of less than a fifth of the home's value, in October last year. Governor Graeme Wheeler started hiking interest rates this year, and last month said house price inflation had moderated since the June monetary policy statement.
"This slowdown is most likely due to the LVR (loan-to-value) speed limits and interest rate rises as well as the annual winter seasonal downturn," spokeswoman Andrea Rush said in a statement. "However, the Reserve Bank has now said it will take a break in rate rises for the moment and banks are advertising that they will negotiate on lending to those with deposits of less than 20 percent."
While today's figures show a slowdown in the annual rate of increase, property values rose 2.3 percent in the three months ended July 31, accelerating from the 2.1 percent pace in the June quarter, and a 0.7 percent three-monthly pace in May.
