The Real Estate Institute of New Zealand (REINZ) has released its House Price Index (HPI) July, which registered a 1.4% decline over the month, a 4.9% fall over the quarter, and a 2.9% decrease year-on-year:
House prices plummeting across New Zealand.
The number of residential property sales also plummeted by 37% over the year to July.
The next table shows that quarterly values declined across 25 out of 26 urban districts:
Broad-based price falls across New Zealand.
The REINZ HPI is considered one of the most comprehensive measures of house prices. This is because, unlike median prices, the HPI adjusts for movements in the composition of sales each month by analysing attributes such as land area, floor area, number of bedrooms etc.
For this reason, the Reserve Bank of New Zealand’s forecasting and macro financial teams use the REINZ HPI.
Commenting on the result, Chief Executive at REINZ Jen Baird noted this was “the first decrease in annual median price movement for New Zealand overall since July 2011”.
Other data providers have also reported heavy house price falls.
QV’s House Price Index (HPI) reported that average dwelling values plunged 4.9% over the three months to July, with all but one major districts recording price falls
CoreLogic’s reported the steepest fall in house prices since the Global Financial Crisis. with dwelling values down 2.5% over the three months to July and values falling across all six major regions over the month.
Tony Alexander’s latest survey data showed that Kiwis are planning to spend less on both owner-occupier and investor mortgages:
Kiwis negative towards housing.
Part of this pessimism relates to the Reserve Bank flagging further aggressive interest rate hikes in a bid to contain runaway inflation, which hit a 32-year high 7.3% over Q2.
If the Reserve Bank follows through, New Zealand house prices will continue to plunge.