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Housing market expected to reheat after winter lull

Radio New Zealand logo Radio New Zealand 3/09/2019
a close up of a sign © RNZ / Claire Eastham-Farrelly

The housing market remains solid but subdued with prices edging higher as growth in regional centres offsets weakness in Auckland, with hopes that lower interest rates and warmer weather will spark renewed activity.

The latest QV house price index was little changed in the three months ended August at 0.2 percent, with growth of just 2.3 percent over the year.

The average national house value was $688,760 with prices easing in much of Auckland, parts of Wellington and Christchurch, and flat in Queenstown.

Senior QV consultant Paul McCorry said many sellers appeared to have been waiting for winter to pass, but those who had listed benefited from keener competition from real estate agents wanting their business, while more properties have been listed with asking prices.

He said the expectation was that the market would start to become more active.

"We expect a renewed enthusiasm particularly at the lower end of the market where first home buyers and first time investors will resume their battle for the most affordable property."

He said lower interest rates, the realisation that there will be no capital gains tax, and the possibility that restrictions on low deposit lending will be reviewed might lift sentiment and spur sales.

"Whilst this is good news for the growing number of first homebuyers in the market, it is almost certainly good news for existing homeowners wanting to move house and who will have larger amounts of equity allowing them to access these special rates."

Mr McCorry said home movers were the most active market group, closely followed by first home buyers and investors.

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