House prices aren't going up as fast as they used to, new data shows, as values climb further and further out of reach for many.
Market analysts CoreLogic said on Wednesday the median price nationwide went up 1.6 percent in August, falling from July's 1.8 percent and April's 3.1 percent.
"As property values rise faster than incomes, the cost of purchasing a home will simply become out of reach for a growing number of would-be buyers, especially as increasing interest rates start to impact the amount of money people can borrow," said head of research Nick Goodall.
It was expected the official cash rate would go up in August, but the sudden introduction of alert level 4 restrictions just before the Reserve Bank's announcement basically ruled that out. The OCR was dropped to a record-low 0.25 percent early last year to stimulate the economy as the economic effects of the COVID-19 pandemic hit.
One of the effects was to drive house prices up faster than ever before. Across the country, prices are up 27 percent on this time last year and 126 percent higher than they were at the last peak in 2007, just before the global financial crisis hit.
But some regions are becoming too pricey. Rotorua and Whangarei saw prices fall in August, by 0.9 and 0.2 percent respectively. In the last quarter, prices in Rotorua have now fallen 2.8 percent.
Hamilton's also seen prices go backwards, down 0.5 percent in the past three months. Other places with negative quarterly growth include Waitomo, Whakatane, Wairoa and Marlborough.
Some regions where prices are still rising are seeing growth slow, including Gisborne (down to 1.4 percent, after going up 38 percent in just a year) and Whanganui (dropping to 0.3 percent for August).
Growth remains strong in Hauraki (up 23.7 percent in the last three months), Grey District (15.8), Kaikoura (12.6), Kawerau (12), Matamata (11.2) and Clutha (11).
The priciest town is Queenstown, where the median price is now $1.39 million, up 3.4 percent in three months. Auckland is just behind at $1.34 million - though the city's eastern region is closing in on $2 million. Auckland was the only main centre where prices went up faster than in July - three-monthly growth moving from 5 to 5.7 percent.
The lowest prices anywhere in New Zealand are in Buller, where the average place will set you back $276,136 - almost exactly the same as a 20 percent deposit on the median Auckland home.
The median price nationwide is $937,148 - up 5.2 percent in three months and 27 percent in a year. Though a slowdown appears to be underway, the lockdown could - at least temporarily - put a halt to that.
"Through lockdowns it is harder for agents to source leads and for vendors to prepare their property for sale," said Goodall. "Tracking of early market indicators... shows real estate agent activity has dropped by -52 percent compared to the week before lockdown.
"This further tightening of supply could lead to some temporary renewed upwards price pressure as pent up demand competes for limited listings."
But without other stimulatory measures used to prop up the economy last year - such as quantitative easing and temporary removal of loan-to-value restrictions (LVR) - Goodall said any lockdown price boom this year would be short-lived.
"The current LVR settings are tighter than prior to the initial lockdown (40 percent deposit requirement for investors) and the Reserve Bank has been very clear that the next move for the OCR is up.
"In a recent release they went as far as saying that had we not been plunged into the snap lockdown on the day of their last monetary policy review, then they would have lifted the OCR. Guidance then, for their next decision on October 6 is almost certainly an OCR increase of at least 25 basis points, even if parts of the country remain at alert level three or four.
"This will maintain a degree of upwards pressure on mortgage rates which historically have worked as a headwind against value growth."
