New Zealand house prices suffered one of their biggest quarterly drops on record in the three months through September, and the worst may not be over.
That’s according to CoreLogic New Zealand, which said the 4.1% quarterly decline is second only to a 4.4% drop in the wake of the global financial crisis 14 years ago. Prices fell for a sixth consecutive month, easing 1.5% after a 1.8% fall in August, while the annual rate of increase dropped to 2.8%, the lowest since 2019, CoreLogic said Wednesday in Wellington.
Prices in Auckland, New Zealand’s largest city, fell 4% in the three-month period to an average of NZ$1.39 million ($790,000). In capital city Wellington they slumped 8.5%, taking the annual decline to 9.1% and the average price to NZ$984,640. The average value for the entire country dropped to NZ$977,158.
Some economists predict the RBNZ will keep raising the Official Cash Rate in 2023, possibly as high as 4.75%, which Goodall said would likely prolong the downturn in the housing market.
“Increases to the OCR may not pass on fully to mortgage interest rates, with competition strong among the banks and forecast increases in the rate also already priced into short-term rates,” he said. “However, with expectations of more increases to come it may be premature to expect the end of the downturn to be here any time soon.”