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Queenstown's property market is subject to a ‘‘great deal of uncertainty’’, the latest QV house price index says.
The property valuing company’s August house price index, released today, shows a 0.7% fall in Queenstown’s average house price in the month.
The fall comes off the back of a sharp 3.5% rise reported in July.
The average value of a residential property in the town is $1,425,821, down from $1,435,138 in July.
QV’s local consultant, Greg Simpson, said the recent Covid-19 outbreak was likely to have a negative effect on the local economy for possibly the short to medium term.
Property market conditions would be subject to a high potential for change and market uncertainty as a result, he said.
While the Reserve Bank had kept the official cash rate (OCR) on hold for the time being, most economists still expected it to rise later this year, Mr Simpson said.
Once the Covid-19 outbreak had settled down, homeowners should expect to see a series of hikes that could add up to 2.5% to mortgage interest rates, he said.
Meanwhile in Dunedin, house prices increased 1.2% last month, to an average value of $685,167.
That is 22.1% higher than at the same time last year.
QV area manager Tim Gibson said demand was high for land and residential property when the region entered lockdown and he expected that trend to continue as the alert levels reduced in the South Island.
Invercargill’s average house value rose 1.4% in August to $455,845. The average value for the city rose 3.5% in the three months to August.
In the South Island, Waimate leads all provincial centres for quarterly house price growth, up 10.9%, followed by the Grey district (up 10.1%) and Westland (up 10%).