Housing market shows possible first shoots of downward slide

The booming housing market could be about to take a tumble. 

The CoreLogic House Price Index (HPI) for February shows a housing slowdown could be on its way with Tauranga the first of the main centres to see a month-on-month drop in house prices.

While values in other centres continue to rise, the Tauranga decline could be a signal of things to come with loan-to-value ratio (LVR) restrictions officially back in place this week and further tightening for investors from May 1.

“A drop in house prices is even more likely following the Finance Minister Grant Robertson’s direction to the Reserve Bank to ‘have regard to the impact of its actions on the Government’s policy of supporting more sustainable house prices’,” says Nick Goodall, CoreLogic’s head of research.