house prices

PHOTO: Experts don’t expect house price growth to reach the same heights as last year. Photo credit: GettyImages.

House prices have grown exponentially over the last year, making home ownership an impossible target for many Kiwis.

Although an initial “bounce” in activity coming out of COVID-19 restrictions is expected, it’s unlikely house prices will continue to grow at the same rate, experts say.

From April 2019 to April 2020, national house prices grew by an average of 0.5 percent per month, CoreLogic figures show.

From May to September 2020, after the first nationwide level 4 lockdown ended, monthly house price growth averaged 0.2 percent. From October 2020 to May 2021, monthly average growth was 2.3 percent.

Current figures show the national average house price in August 2021 was $937,148 –  $199,294 higher than in August 2020 ($737,854).

Asked whether this same level of growth is sustainable over the coming year, CoreLogic chief property economist Kelvin Davidson told Newshub “this time is different”.

More recently, figures over the last three months show monthly growth dropped below 2 percent.

“Affordability is much worse than it was prior to 2020’s lockdown: we now have rising mortgage rates (not falling) and there’s almost no chance that LVRs will be relaxed like last time,” Davidson said.

Coming out of the nationwide lockdown in April 2020, interest rates were at all-time lows. In May, banks were offering fixed interest rates from 2.69 percent. Loan-to-value ratio (LVR) restrictions restricting low deposit lending were temporarily removed for 12 months.



#happyathome #newzealand #allblacks #rugbyunion #rugbybricks #viral #nzrugby #rugby #lockdown #lockdownlife #lockdownnz

♬ original sound – Property Noise Group