House price growth slows in Christchurch but 'too early to say' if market easing

Photo: File / Getty Images
Photo: File / Getty Images
The growth of average residential house values in Christchurch has slowed over the latest quarter - and the number of sales was also down last month.

The latest QV House Price Index shows values in New Zealand rose 6.6 per cent in the three months to the end of June, a fall from 8.8 per cent quarterly growth in May.

However, the national average value was still up nearly 26 per cent on the year earlier to $943,184.

In Christchurch, residential value growth slowed for the second month in a row within greater Christchurch - down from 3.7 per cent in April to 2.5 per cent in May, and now 1.9 per cent in June. Annually, however, house prices in the city have increased by 25.8 per cent to an average $651,914.

Across the wider Canterbury region, house price growth has slowed by an average 1.1  per cent this quarter.

The Selwyn district has bucked the trend so far and held steady, experiencing the most growth this quarter (8.9  per cent), followed by Christchurch City (8.3  per cent) and Waimakariri (7.9 per cent).

Canterbury QV property consultant Olivia Browne said the number of residential sales in Canterbury were down on last month’s figure.

"That is to be expected over the winter months," she said.

"We consider in the short term for more of the same within the greater Christchurch market, with new and re-introduced Government regulations beginning to influence the market.”

"However these factors are still continuing to be offset by a lack of supply and low interest rates, therefore maintaining some value growth,” she said.

QV general manager David Nagel said the slowdown could be linked to a typical winter downturn.

"It's too early to say the market has turned, but this will be encouraging news for government officials and regulators, concerned about the financial risks of an overheated property market," he said.

"This easing comes after a range of government policy announcements earlier this year to dampen activity by property investors and speculators, while there's also plenty of chatter about interest rates rising later next year."

Of the 16 major urban centres QV monitors, all except Rotorua saw a drop in quarterly growth compared with last month.

Central New Zealand continues to show the strongest annual rate of value growth, with the three fastest growing regions being Manawatu-Whanganui, greater Wellington and Hawke's Bay.

The strongest value gains over the past three months have come from Hastings, closely followed by Palmerston North.

Tauranga continued to lead the way for urban centres for the second consecutive month, followed by Christchurch.

The three lowest annual growth rates were all in the South Island, although the Otago region still experienced significant increase, as well as Southland and Tasman.

"But while interest rates are still at record lows, accompanied with a dearth of property listings in most parts of the country, it's unlikely that we see house values fall any time soon," Nagel said.

"We'll likely see a continued slowing in the rate of price increases over the coming months as the property market absorbs the recent changes and winter really sets in."

-Additional reporting RNZ

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