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Continuing pressure on house prices

House prices don't look set to rise any time soon, according to the latest ANZ Property Focus.

Wednesday, June 23rd 2010, 5:01PM 1 Comment

by Maddy Milicich

The ANZ Property Gauges, which uses 10 indicators to measure the state of the property market and for signs of change that will impact on house prices, reported overall downward pressure on house prices in June.

Rising interest rates is the biggest negative factor influencing the market, with affordability, serviceability and liquidity all showing a negative impact on house prices as a result.

The Official Cash Rate (OCR) hike earlier this month and subsequent upward movement of floating and short-term fixed interest rates have dented affordability for new entrants into the housing market and although existing borrowers continue to pay down debt, demand for credit is still subdued and households continue to deleverage.

Building consents and house sales look to face headwinds in the future, according to the report, with house sales still low as uncertainty weighs and although consents have picked up slightly, they still have a way to go towards recovery.

Supply and demand remains out-of-kilter and although dynamics are looking positive in this regard, credit and de-leveraging are more dominant in terms of impact on house prices.

Mortgagee sales have dropped, indicating there are less desperate sellers out there.

Currently there are no signs of upward pressure on rents, according to ANZ, despite announcements in the Budget on GST increases and the loss of depreciation on buildings, the excess costs of which are expected to be passed on to tenants eventually.

Migration is easing and although there is still a slight inflow, gains are easing fast and the gauges peg the indicator as being neutral for house prices.

ANZ says New Zealand appears to be taking the opportunity to get its house, or balance sheet, in order and how long this continues will be one factor influencing how quickly interest rates will rise.

 

 

 

« Momentum building in house market, according to ANZFree Investment Property Showcase Events: Auckland, Wellington and Christchurch »

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Comments from our readers

On 24 June 2010 at 10:36 pm Steve said:
For a better balanced economy, house prices need to fall rather than rise. Less of the country's wealth should be tied up in nonproductive residential real estate, freeing investment for more productive purposes. Also, the last thing the country needs is another round of foreign borrowing to fund a renewed property bubble.
Commenting is closed

 

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 4.94 - - -
AIA - Go Home Loans 7.49 5.79 5.49 5.59
ANZ 7.39 6.39 6.19 6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.79 5.59 5.59
ASB Bank 7.39 5.79 5.49 5.59
ASB Better Homes Top Up - - - 1.00
Avanti Finance 7.90 - - -
Basecorp Finance ▼8.35 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.54 - - -
BNZ - Rapid Repay 7.54 - - -
BNZ - Std 7.44 ▼5.79 ▼5.59 5.69
BNZ - TotalMoney 7.54 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.69 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 6.95 5.79 5.59 5.69
Co-operative Bank - Standard 6.95 6.29 6.09 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 5.99 5.89 -
First Credit Union Standard ▼7.69 6.69 6.39 -
Heartland Bank - Online 6.99 ▼5.49 ▼5.39 ▼5.45
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.60 6.65 6.40 -
ICBC 7.49 5.79 5.59 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.25 ▼6.69 ▼6.49 6.49
Kiwibank - Offset 7.25 - - -
Kiwibank Special 7.25 ▼5.79 ▼5.59 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 7.94 ▼5.75 ▼5.99 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.49 6.95 6.29 6.29
SBS Bank Special - ▼5.89 ▼5.49 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 4.94 ▼4.89 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.19 6.49 ▼6.39 ▼6.39
TSB Special 7.39 5.69 ▼5.59 ▼5.59
Unity 7.64 ▼5.79 ▼5.55 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society ▼7.70 ▼5.95 ▼5.75 -
Westpac 7.39 6.39 6.09 6.19
Westpac Choices Everyday 7.49 - - -
Westpac Offset 7.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 5.79 5.49 5.59
Median 7.49 5.84 5.75 5.69

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