New Zealand housing market continues to cool off

Source: Xinhua| 2019-07-10 11:50:21|Editor: Yang Yi
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WELLINGTON, July 10 (Xinhua) -- New Zealand housing market continued to cool off with a decline in the rate of annual growth from 3.8 percent in June 2018 to 1.7 percent in June 2019, although values are still in positive territory, the Real Estate Institute of New Zealand (REINZ) said on Wednesday.

The Southland region's House Price Index had the strongest growth in the country, with a 20.2-percent increase to a new record high of 3,049 (up from an annual increase of 10.5 percent in June 2018 and an index level of 2,536).

This was followed by Manawatu/Wanganui with an annual growth rate of 18.3 percent to 3,089, up from an annual increase of 9.8 percent at the same time last year and Gisborne/Hawke’s Bay with a 9.1 percent annual increase to 2,738.

“The Southland region was clearly the shining star in June with the strongest annual growth rate seen across the country, it was also the second region in the country (behind Manawatu/Wanganui) to go over the 3,000 mark in the overall index,” Bindi Norwell, Chief Executive at REINZ said.

“Over the last two years, Southland has only seen two months where the region hasn’t experienced double-digit year-on-year growth. With such strong level of growth for so long now, this is certainly an area to watch over the coming months,” she added.

Looking around the country, 11 out of 12 regions saw an annual increase in the index level. The only region not to experience an increase was Auckland, which saw an annual decrease of -3.5 percent to 2,784. Although, this is up on the trough of 2,774 reported in April this year.

“While the annual figure shows a fall of -3.5 percent in the value of Auckland’s property market, the last two months have shown an uplift of +0.3 percent from April to May and +0.1 percent from May to June. While it’s too early to call this a trend, it is certainly the first signs of some renewed confidence returning to the market.

“What makes this growth in Auckland more interesting is that it’s in winter, when traditionally values are a little more subdued. Clarity around the Capital Gains Tax being off the table and record low interest rates are a key influence here and we look forward to seeing what happens in the coming months as we get closer to spring and more confidence returns to the market,” Norwell said.

Other regions that saw strong results in June were Otago (+8.3 percent) and Waikato (+5.2 percent) to new record high index levels of 2,932 and 2,949 respectively when compared to the same time last year.