House prices fall at fastest rate in more than a decade

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PHOTO: Newly built houses. (Source: rnz.co.nz)

House prices are falling at the fastest rate in more than a decade and at the fastest pace since the Global Financial Crisis (GFC).

Corelogic’s House Price Index fell 0.9% last month as the downturn in the property market became further entrenched.

The drop of 2.5% for the past three months was the largest quarterly fall since the GFC.

Corelogic NZ head of research Nick Goodall said despite the steep decline in prices, a property crash was not on his radar.

“The relatively controlled nature of this downturn is unlikely to ring alarm bells for those at the RBNZ [Reserve Bank of New Zealand] especially after such a strong upswing in values prior to the end of 2021,” Goodall said.

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“Trying to get control of inflation through OCR [Official Cash Rate] increases is likely to remain their number one priority for now.”

Prices fell in each of the six main centres and previously resilient Christchurch joined the negative trend in other major cities.

Prices in the Garden City were down 1.6% last month, while Wellington posted the biggest monthly fall of 3.6% in July.

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For the past three months, Wellington’s prices were down a marked 6.7%.

Values in Dunedin remained slightly above the same time last year, but fell a further 1.3% in July to take the cumulative fall since the start of the year to 5.8%.

Auckland prices dropped a further 0.7% last month, with a similar falls in Hamilton of 0.6% and Tauranga of 0.9%.

Outside the main cities, all main urban areas experienced a price decline over the last three months.

In particular, Napier values were down 6.1% since April to leave the average value only 3 percent above the same time last year.