File aerial photo taken on April 9, 2021 shows a residential construction site in Wellington, New Zealand. The average value of a New Zealand home now exceeds 1 million New Zealand dollars for the first time, according to statistics released by CoreLogic's House Price Index (HPI) on Jan. 5, 2022.(Xinhua/Guo Lei)
WELLINGTON, Jan. 6 (Xinhua) -- The average value of a New Zealand home now exceeds 1 million New Zealand dollars for the first time, show statistics released by CoreLogic's House Price Index (HPI) on Wednesday.
The average price of the houses sits at 1,006,632 New Zealand dollars in December 2021, with 27.6 percent annual growth over the full calendar year, exceeding the previous record of 24.4 percent annual growth in 2003.
Among the top list cities, the average property value of Queenstown surpasses 1.5 million New Zealand dollars, the largest city Auckland sits at 1.42 million, and the capital city Wellington, 1.12 million.
CoreLogic says despite the persistently strong monthly property value increase, the annual rate of growth dropped for the second month in a row after peaking at 28.8 percent at the end of October 2021, indicating the impending market slowdown.
CoreLogic NZ Head of Research Nick Goodall contributed the remarkable year of 2021 in the property market to record-low interest rates and the easy access for most borrowers to get money from commercial banks, but he thought both these factors are changing now.
"Since the changes to the Credit Contract and Consumer Finance Act (CCCFA) on Dec. 1, 2021, which brings greater scrutiny of a potential borrower's expenses and ability to repay their loan, feedback from mortgage advisors has been very strong that the tightening has gone too far," Goodall said.
He said the changes haven't impacted all borrowers immediately, with values still rising at above-average rates, which are likely to be felt more widely throughout 2022 as rising interest rates and diminishing affordability combine to reduce borrowing capacity.
Besides the tightening financial measures for borrowers, the Reserve Bank of New Zealand started to lift the Official Cash Rate (OCR) from 0.25 percent to 0.75 percent in the past months to curb the record-high inflation. In addition, commercial banks forecast continued upward movement of OCR in the year 2022. (1 New Zealand dollar equals 0.68 U.S. dollar) Enditem
File aerial photo taken on April 9, 2021 shows a residential construction site in Wellington, New Zealand. The average value of a New Zealand home now exceeds 1 million New Zealand dollars for the first time, according to statistics released by CoreLogic's House Price Index (HPI) on Jan. 5, 2022.(Xinhua/Guo Lei)
