N.Z. House Prices Rise at Slowest Annual Pace Since November on Loan Costs
N.Z. House Prices Rise at Slowest Annual Pace Since November
Mark Coote/Bloomberg
New Zealand’s house prices rose at the slowest annual pace since November as home-loan interest rates increased and consumer borrowing declined.
New Zealand’s house prices rose at the slowest annual pace since November as home-loan interest rates increased and consumer borrowing declined. Photographer: Mark Coote/Bloomberg
New Zealand’s house prices rose at the slowest annual pace since November as home-loan interest rates increased and consumer borrowing declined.
Prices advanced 2 percent in September from a year earlier, after gaining 3.1 percent in August, according to an index compiled by Quotable Value New Zealand Ltd.
Weaker demand for property adds to signs that New Zealand’s economic recovery may be gradual this year. All 14 economists surveyed by Bloomberg News expect central bank Governor Alan Bollard to refrain from raising the official cash rate until next year after he kept the benchmark unchanged at 3 percent on Sept. 16 and lowered his growth forecasts.
“The housing market is currently experiencing a very low level of sales,” said Jonno Ingerson, research director at Quotable Value. “Some buyers are holding back to see where the market will go. Others are unable to find suitable properties.”
The Wellington, New Zealand-based government valuation agency doesn’t publish monthly index values. It said prices have fallen 1.4 percent since March.
Mortgage approvals in the three months ended Oct. 1 fell 26 percent from a year earlier, central bank figures show. Borrowing for housing rose 2.4 percent in August from a year earlier, the slowest pace since records began in 1999, according to the bank.
The average variable home-loan rate rose to 6.4 percent in August from 6.25 percent in July after Bollard increased the cash rate for a second month on July 29, according to central bank figures. The average one-year home-loan rate was 6.51 percent in August compared with 5.70 percent a year earlier.
Quotable Value said the magnitude 7 earthquake that struck the Canterbury district on Sept. 4 stopped real estate transactions for some weeks. It had insufficient information to create a valid regional index, so the annual change recorded for the quake-hit region was the same as in August, it said.
The lack of Canterbury data won’t have affected the national index, it said.
To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.
To contact the editor responsible for this story: Chris Anstey at canstey@bloomberg.net
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