CoreLogic QV May House Price Index: Nothing wrong with slow and steady
The CoreLogic QV House Price Index showed that NZ average property values were flat in May and up by only 0.1% over the past three months. The annual growth rate slowed from 2.7% in April to 2.3% in May. With affordability still stretched in many parts of the country and sales volumes subdued, CoreLogic property economist Kelvin Davidson said, “It’s no surprise that the slowdown in values has continued.”
Davidson said “It’s largely been another steady-as-she-goes month for the property market in May. The cut in the official cash rate on the 8th of the month probably helped some buyers to offer a bit more than they otherwise could have afforded, while the effects of the scrapping of the capital gains tax proposals back in April will also be filtering their way into the market too”.
For investors, he said the economics of the game are still changing, due for example to the need to increase insulation standards and the looming tax ring-fence for rental property losses. “We’ve been warning that although the ring-fence isn’t law yet, it needs to be accounted for by investors as of now, so it’s reassuring to hear anecdotally that this is happening. Although the Reserve Bank didn’t change the loan-to-value (LVR) rules in the latest Financial Stability Report, there seems to be a good chance of more leeway for investors come November.”
source: CoreLogic Media NZ