Residential property values are continuing to rise in most parts of New Zealand but not at the hectic pace of last year, according to Quotable Value.
The average value of NZ homes was $1,063,765 at the end of January, up $10,450 since the end of December, according to the QV House Price Index, with both figures based on sales over the previous three month periods.
However the growth rate of property values slowed to 6.1% over the three months to the end of January, down from 7.8% in the three months to December.
Only three regions had lower average values at the end of January than they did at the end of December - Nelson, Queenstown-Lakes and Dunedin, with all other regions showing gains. (See the chart below for the average values in all regions).
"We saw spectacular value growth throughout 2021, with increases we'll unlikely see again for a generation," QV General Manager David Nagel said.
"But with interest rates on the rise, tightening credit conditions and supply pressures now easing, we'll likely see a property market return to a more sustainable level of growth.
"We've seen house listings surge in many locations where previously there was an acute lack of stock, and with the banks tightening their lending criteria in response to the new legislation, we've noticed a real falling off in auction and open home attendance.
"We're not seeing the double digit quarterly value growth we were used to seeing throughout last year," Nagel said.
However he is not expecting any major declines in property values either.
"If the floodgates were to open again to new migrants and returning Kiwis at the levels last seen in 2019, then we could see some strength return to the property market as demand for housing increases," he said.
"But more likely we'll see a gradual decline in the rate of growth, as interest rates rise and tax deductibility rules take effect for investors, with only a few locations showing any significant reductions in value."
You can read QV's full House Price Index report, which includes regional commentaries, here.
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