It is the first time that the figures have dipped below 2% this year
House price value growth halved in the lower and upper quartiles in 16 major urban centres in May, according to the latest Quotable Value (QV) Quartile Index.
The index tracked the prices of the 25% most and least expensive homes in New Zealand. It found that the average value growth across the lower and upper quartiles in the 16 major urban centres in the country reached 1.7% in May 2021 – down from 3.5% and 3.4%, respectively, in April 2021.
According to QV, it is the first time that the average monthly house price growth across the centres has dipped below 2% this year – with many of the most significant drops occurring in some of the hottest residential property markets in New Zealand, such as Marlborough, Wellington City, Hastings, and Napier.
In the three months ending on May 31, 2021, QV saw the lower and upper quartile prices in the 16 major urban centres increase by 8.3% and 8.5%, respectively – down from 9.6% and 9.3% in April. It also found that the most significant gains this quarter were at the upper end of the residential property market in Franklin (13.2%), Marlborough (13.1%) and Hastings (12.7%), as well as at the first-home buyer level in Papakura (13%) and Whangarei (12.6%).
QV general manager David Nagel said we still have a long way to go until QV confirms that the market is cooling off.
“Prices are still going up, by a lot in many places – they just didn’t go up by as much in May as they have in previous months,” Nagel said.
“Time will tell whether this is the start of a long-term trend, a slight seasonal downturn as we head into the colder months when the property market tends to be less active anyway, or even a market anomaly that will rectify itself in next month’s set of figures, which could very well be the case.”
However, Nagel expects the rate of price increases to continue to slow down over the coming months as the property market begins to find its new normal in the wake of the government’s March tax announcement, which has caused many potential buyers to pause and assess the impacts.
“Property owners continue to make significant capital gains up and down the country right now, so any talk of the property market cooling may be a tad premature. We should have a clearer picture next month and the one after that,” Nagel added.
