Housing market

PHOTO: File photo. Photo: RNZ / Nate McKinnon

The housing market is at a turning point with sales activity and price growth expected to peak in the coming months, if they haven’t already.

CoreLogic’s Property Market and Economic Update for the second quarter ended in June found the residential property market was losing momentum.

After a hot start to the year, sales have fallen back to levels last seen in 2019 with fewer properties on the market while house price growth lost pace, falling from 3.1 percent in April, to 2.2 percent in May and to 1.8 percent for June.

“As sales activity dips over the months it’s also likely that a slowdown for values will become more evident, although house price falls still seem unlikely in this cycle,” CoreLogic chief economist Kelvin Davidson said.

The slowdown in prices was largely due to affordability pressures, but also because of the 40 percent deposit requirement and extended bright-line test for investors, as well as the tightening of interest deductibility rules and the Reserve Bank’s plan to look at debt-to-income restrictions.