Market rise rate slowing for property

Photo: ODT files
Photo: ODT files
It may be too soon to say whether Dunedin’s red-hot residential property market is beginning to cool.

Quotable Value (QV) area manager Tim Gibson said the city’s house price growth dropped from 2.5% in April to 0.9% in May.

There had been a drop in job requests for finance, which could be a sign the ‘‘red-hot’’ market was cooling down, he said.

However, Dunedin’s average house price ($665,130) remained 5.2% higher this quarter than last and 18.5% higher than the same time last year,

The greatest amount of value growth occurred on the peninsula and coast.

The submission stage for the Dunedin City Council’s proposed variation to its Second-Generation District Plan had just ended, which could enable additional housing capacity through specific rule and policy changes and through rezoning specific sites.

“This variation zoning change is most prominent within the central Dunedin suburbs of Mornington and Roslyn, through to Maori Hill, where now almost the entire suburbs have been identified as potential to be rezoned,” he said. “We’re already seeing evidence of a low number of sales starting to filter in where potential land banking or speculating that the zone change will occur is the motive to purchase.”

Quarterly value growth in Queenstown also dropped. Queenstown had a 5.3% rise in the average house price this quarter, a drop from 6.1% reported by QV last month.

The average house price in Queenstown was now $1,385,848.

QV property consultant Greg Simpson said analysts predicted interest rates looked stable for now, but there was a growing expectation of higher interest rates in the next 18 months, which would have ramifications for all property owners and tenants.

Invercargill’s rapid house price growth cooled slightly in May, dropping from 3% in April to just 0.9% in May, but the city’s average house price ($440,590) remained 14.3% higher than at the corresponding time last year.

The national average value was now $931,928.

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