WELLINGTON, New Zealand--New Zealand home prices declined in July from June and the number of properties sold dropped sharply on-year, data from the Real Estate Institute of New Zealand showed Friday.
REINZ said the national median home price in July was NZ$518,000 (US$377,000), 2.3% lower than in June. The figure is up 3.4% from a year ago.
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New Zealand's central bank said this week that house prices have moderated due to loan-to-value ratio restrictions, affordability constraints and a tightening in credit conditions, and that this would probably continue.
But it also said there is still a chance strong population growth and resource constraints in the construction sector could send them higher once again.
REINZ said there should be a review of New Zealand's current loan-to-value rules as the number of properties sold in July is the lowest since August 2014.
Compared with July 2016, there were 24.5% fewer homes sold across New Zealand, and 10.5% fewer sold than June.
"The LVR restrictions have done their job of slowing the market, but now it seems they are acting as a handbrake which is why REINZ is calling for LVRs to be reviewed for first time buyers," Chief Executive Bindi Norwell said.
The number of days it took to sell a house, a gauge of underlying demand, increased. The median number of days to sell was 35, four days longer than a year ago.
The REINZ Monthly Housing Index, which uses all sales by REINZ members rather than just a median price, was up 1.2% on year and flat from June to July.
The housing market is one of the major challenges analysts see for New Zealand's economy, especially in Auckland, the commercial capital, where chronic undersupply and high demand, fueled in part by high migration both from overseas and the country's regions, have pushed prices to record levels.
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(END) Dow Jones Newswires
August 10, 2017 17:33 ET (21:33 GMT)