Momentum in housing market slows further

The rate house prices are increasing annually has dropped for the first time in more than a year while listings are rising, proving market momentum is waning, a property researcher says.

House prices nationwide were up by 1.8 per cent to a median of $987,401 in November, according to the latest CoreLogic House Price Index.

But the rate was down from 2.1 per cent in October and the annual rate fell to 28.4 per cent from 28.8 in October.

CoreLogic head of research Nick Goodall said it was the first time the annual rate had dropped since August last year when the market stalled following the first Covid-19 lockdown in April and May.

‘‘It is the clearest sign yet the market boom is easing, and marks a return to the trend of easing price increases after a surprise pick-up last month.’’

The national trend was replicated around the country. In the main centres, the monthly increase rate eased everywhere, apart from Dunedin, and the annual rate declined everywhere but Christchurch.

In Auckland, prices increased 1.5 per cent in November, down from 2.6 per cent last month. That left the average price at $1,402,845, which was 25.7 per cent higher than November last year.

While Wellington prices rose 1 per cent last month to an average of $1,114,979, that was down on October’s increase of 1.9 per cent. Prices were up 33.5 per cent on the same time last year.

Christchurch prices increased by 3.7 per cent over November, which took the city’s average price to $719,493, the first time it has been over $700,000. It represented a record annual increase of 35.5 per cent.

Goodall said the easing trend was likely to continue, driven by rising interest rates and the tighter lending conditions created by new loan-to-value ratios and looming changes to responsible lending rules.

There had been a sharp increase in the number of houses on the market in the Wellington and Manawatu-Whanganui regions, where advertised stock was up by 30 and 33 per cent respectively on last year.

The Hawke’s Bay and Southland also had more properties on the market than this time last year, with 22 and 2 per cent.

Of the main centres, listings in Christchurch and Auckland were down by 25 and 26 per cent on last year, but in Wellington they were up 15 per cent.