Housing price growth slows: CoreLogic

House price inflation began to slow in June according to CoreLogic data, declining to 1.8% over the past month.

Thursday, July 1st 2021, 10:41AM

The real estate research firm's latest data shows that price inflation was slightly lower than the 2.2% recorded in May. 

Despite this, the average value of homes continues to hit record levels. 

The average value of NZ homes reached over $906,532 in June, surpassing the $900,000 mark for the first time. 

Average house prices have jumped by more than 22% over the past year, according to the data. 

Nick Goodall, CoreLogic's head of research, said the rate of growth slowed in 12 of NZ's 18 markets, with a further three recording drops over the month.

He added: "The exceptional growth displayed during the past year was not sustainable, particularly with increased deposit requirements, market uncertainty driven by Government regulation and the prospect of higher interest rates. The turnaround should perhaps not be too much of a surprise, though the timing of it certainly is."

Goodall said the Reserve Bank's recent moves to add DTI tools would add "another element of uncertainty for the market".

"This is particularly true for investors, for whom any restrictions will likely be tighter, further limiting their activity in the market."

Goodall also warned about the prospect of higher interest rates on the horizon, and pointed to record average household mortgage levels. 

"Impending increases to interest rates are the other major factor weighing on the minds of owners' and would-be buyers' minds," he said.

"Even a small increase in mortgage rates could have a significant impact," Goodall added.

Tags: CoreLogic house prices housing market Lending Mortgage Rates property values

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