The growth rate of house prices in New Zealand has fallen in comparison to international markets.
The Knight Frank Global House Price Index showed that average house prices across 56 countries increased by 10% over the 12 months ending June 2022.
However, in New Zealand, prices only increased by 5.5%. Once adjusted for inflation, they were down 1.7%.
This left New Zealand in position 41 in the price growth rankings, down from second place at the same time last year.
Turkey had the biggest increases at 161%, but Knight Frank researcher Kate Everett-Allen said this could be ignored because the country’s inflation was at a 24-year high. Slovakia and the Czech Republic took out the second and third places, with increases of 25.5% and 23.5%, respectively. Also, in the top ten were the United States and Canada.
Everett-Allen said that while the global picture was one of relative resilience, there were signs that the Asia-Pacific region was “ahead of the slowdown curve”.
Of the seven markets that saw price declines between March and June, six were in the Asia-Pacific. They were Hong Kong, South Korea, China, Malaysia, Australia and New Zealand.
“New responsible lending laws and seven rate rises since October 2021 have shifted buyer sentiment, from a fear of missing out to a fear of overpaying,” Everett-Allen said.
In recent years New Zealand’s escalating prices have attracted international attention, but that attention is now focused on its downturn.
CoreLogic, a US-based analytics firm, recently labelled the New Zealand market as a “canary in the coal mine”, and said its Australian counterparts were watching it to see what might happen in their own market.
