Corelogic stories
Tighter credit and more listings are likely to keep house price gains easing as annual growth slips for the first time since August 2020.
Record-low losses and near-universal gains in New Zealand’s housing market are being driven by tight supply, strong demand and cheap borrowing.
Rising mortgage costs and tighter lending rules are expected to cool the market, even after values posted their first monthly acceleration in six months.
Higher mortgage rates and tighter lending rules are already cooling New Zealand’s housing market, with investor demand slipping further.
Property values rose 1.4% nationally in September, but activity is easing as tighter lending and higher rates weigh on buyers.
Higher mortgage costs are unlikely to deter first-time buyers while rents keep climbing and remain above many monthly loan repayments.
Property values have surged nationwide, leaving first-home buyers facing tougher affordability as almost every New Zealand suburb gained at least 10%.
Homeowners face higher rebuild insurance bills as labour and materials shortages pushed residential construction costs up 2.2% in June.
Affordability pressures are starting to bite, with Hamilton and Rotorua both posting quarterly falls after a rapid run-up in values.
Nearly all New Zealand homes sold for a profit in the June quarter, as record-low mortgage rates and tight listings drove gains.
Borrowers face higher repayments and tighter credit as rate rises, though lockdown likely postpones the Reserve Bank’s next move.
Borrowers face tighter lending rules as the Reserve Bank moves to curb risky loans amid house values rising 1.8% in July.
Rising mortgage rates and tax changes are set to cool sales, but CoreLogic says a full property downturn still looks unlikely.
Cheaper provincial suburbs have driven New Zealand's property boom, with Manunui up 51.8% and Hargest selling in just six days.
Government help may be needed as first-time purchasers’ share of the market falls to its lowest level since 2018, CoreLogic says.
Busy sites, labour shortages and timber scarcities are pushing New Zealand house build costs higher, with CoreLogic flagging more rises ahead.
Signs of cooling are emerging as quieter open homes and more auctions passing in are expected to slow gains after a red-hot year.
Investor borrowing has already been curbed, as new housing rules begin to slow sales and cool the market further in 2021.
Landlords may avoid selling despite new tax rules, as CoreLogic says capital gains and Brightline liabilities outweigh the extra borrowing costs.
Investor demand is set to ease as tax changes and tighter lending curbs threaten to cool the market, though prices are still rising fast.
