The Real Estate Institute of New Zealand (REINZ) has released its August house price results, which registered a rebound in values following three consecutive months of fall, but another slowing in annual growth.
In the month of August, the national stratified median price rose by 1.1% to around $442,000. Prices were up in two of the major capitals – i.e. up 5.5% in Wellington and by 0.4% in Auckland – but fell by 0.8% in Christchurch. Over the quarter, prices fell were dead flat (0% change) nationally, although rises were recorded in each of the major capitals.
The price changes are shown more clearly in the below chart, which shows the values in index form since 2005:
Annual house price growth slowed to 4.8% nationally in the year to August 2014 to be 16.1% above the November 2007 peak. Prices in New Zealand’s largest city, Auckland, rose by 5.8% in the year to August to be 33.9% above their July 2007 peak. This was followed by New Zealand’s second biggest city, Christchurch, where prices rose by 11.0% over the year to be 23.3% above their 2007 peak. Finally, prices in the capital, Wellington, rose by 2.8% in the year to August and were 2.5% above the September 2007 peak.
The below chart shows the annual price growth in trend terms (3-month moving average) in order to smooth volatility, with annual price growth clearly weakening:
And the next chart shows growth at the national level only, which paints an even clearer picture:
The overall weakening of price growth amid the strengthening domestic economy and rising population growth suggests the RBNZ’s macro-prudential curbs on high risk mortgage lending and recent interest rate increases are still working.
Other indicators support this contention.
According to the REINZ, sales volumes were 16.3% lower than August 2013. In a similar vein, New Zealand housing loan approvals continue to fall, as shown below: