Home prices have fallen the largest quarterly nationwide since early 2009, and it’s unclear how long the decline will last, real estate researchers said.
CoreLogic’s latest home price index shows that it fell 0.8% nationwide in June after falling 0.8% in May and April. The national average was $ 1.01 million, up 12.8% from $ 906,532 in the same period last year.
However, the quarterly decline of 2.3% was the largest decline in the three months since February 2009, just before the market bottomed out after the global financial crisis (GFC).
Quarterly price declines were recorded at all major centers except Christchurch, with widespread declines.
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Auckland and Wellington fell the most at 4.9% and 4.7%, with average prices at $ 1.44 million and $ 1.07 million, respectively.
In Hamilton, Tauranga and Dunedin, prices fell 1.2%, 1.8% and 2.4% to an average of $ 880,947, $ 1.16 million and $ 682,108. In Christchurch, prices rose 3.3% to $ 783,216.
Only three of the regional centers, Whangārei, New Plymouth and Queenstown, rose quarterly, but Lower Hutt and Upper Hutt fell the most, down 6.2% and 6.9%.
Nick Goodall, Head of Research at CoreLogic, said the GFC valley came after a series of negative quarters, but the current recession is just beginning and it’s unclear how long and how far it will go. did.
“Under these circumstances, it is difficult to predict a break from falling home prices in the short term.
“A recovery in demand will help, but it probably won’t happen until interest rates stabilize or start to fall again.”
The Relaxation of credit contracts and lending rules of the Consumer Finance Act He said the market impact was likely to be minimal, partly because of his very low confidence.
“But there is a risk that the negativity goes beyond the mark and makes things worse than it would otherwise be.”
He said the fear of recession contributed to the dark outlook, but he didn’t expect a crash to come.
“Instead, we expect people to have a job and the labor market is tight and supportive, so we expect a gentle return to some degree of normality.”
CoreLogic expects peak-to-trough prices to fall 11.8%.It will return them to where they were in the middle of 2021.
He chose March as the trough, but as it happened after the GFC, the trough is likely to have a long plateau period, but the trough may be closer than previously thought, Goodall said.
A few The region was more vulnerable to larger price dropsShe said.
These included areas where many real estate was sold for development, such as Lower Hutt and Upper Hutt, South Auckland, and particularly affordable markets such as Central North Island and Hawke’s Bay.
However, the affordability of housing compared to income still favored, and Christchurch, which attracted buyers to the city, could function more powerfully.
Falling home prices will help improve affordability, but higher mortgage costs and more stringent lending policies will probably outweigh the benefits of new affordability, Mr. Gudall said.
“Nevertheless, there is still demand for real estate, and some buyers are looking for ways to buy, and there are opportunities in some regions and some real estate types.”