House sales drop owing to high prices
Reports from Quotable Value (QV) indicate that there is a gradual drop in houses sold in recent years with a notable consecutive decline in every month of 2017. February and October 2017 recorded an alarming more than 20 percent drop. This is a result of the increased prices of houses, higher house deposits required, tight lending processes by banks and general financial constraints.
Andrea Rush, the speaker of Quotable Value, said that the economic situation has returned to normalcy in the real estate sector after the fall in some investors coming in the country for the past three years. Value of properties has however continued rising through at slower growth rate compared to previous years.
A 6.6 percent increased value, $NZ41, 660 ($F61, 512) an amount for residential property was noted over 2017 with houses averaging at a price of $N669, 565 ($F988, 233) in December.
Ms. Rush attributes the slowed down the growth rate to the new Loan to Value Ratio (LVR) restrictions that dictate stricter lending policies by banks and high deposits required worth 40 percent to investors. The upcoming election also leaves many uncertain of the economic growth trends.
The country recorded a slowed down growth rate by October 2017 of 3.9 percent for annual nationwide value growth. This is the lowest to be logged in five years. Auckland Region recorded a -0.6 percent rate of growth, the weakest since 2011.