Decline in house prices gains more traction but crash not expected – CoreLogic

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 percent last month as the downturn in the property market became further entrenched.

The drop of 2.5 percent 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.

“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 percent last month, while Wellington posted the biggest monthly fall of 3.6 percent in July.

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

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

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

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 percent since April to leave the average value only 3 percent above the same time last year.

Napier property values have fallen 6.1 percent since April.
Photo: 123rf

In Palmerston North, persistent falls have left the average value only 0.9 percent ahead of the same time last year, to sit at $720,000.

Weakness has crept into the Queenstown market, though the annual growth rate of 20.5 percent tells the story of a resilient and unique market, no doubt buoyed by the full opening of the New Zealand border at the start of this month.