New data shows house prices won’t ‘go anywhere but down’ for at least a year

A leading economist has painted a grim picture for homeowners but good news for first-home buyers, describing a new residential property report as just the beginning of plummeting house prices.

The Tuesday report from the Real Estate Institute of New Zealand found house prices continued to ease and properties were taking longer to sell.

National median house prices fell 7.5 percent in the year to October – with Auckland’s median price plummeting 12.7 percent in the same period.

Infometrics principal economist Brad Olsen told AM Early he wasn’t surprised by the level of declines.

“We’re still very much in that position where house prices will decline,” he told host Oriini Kaipara.

“It is a big shift – what we do see when we look through the numbers is that interest rates are still rising and, if that’s the case, you’ve got a lot of potential buyers out there who are still going to be pretty limited when it comes to whether or not they can get the financing to purchase. That being the case, you aren’t going to see house prices go anywhere but down, in our minds, still over the next 12 months or so.”

In better news, Olsen did not believe a housing crash was on the horizon.

“When we look at those house price declines, we see that they are going down – yes – but they’re… a steady decline.”