Thursday, August 11, 2022
International

House price growth in New Zealand third fastest globally

House price

Globally, prices rose by 9.4 per cent on an annual basis in the three months to September

House prices in New Zealand are now rising at the third-fastest rate in the world, but were the fastest globally over the past five years, property consultancy Knight Frank says.

Its latest global house price index shows that from 2016 New Zealand’s prices increased by 60 per cent, the highest of the countries in its index. Until early last year, it had been tracking at a rate more like 32 per cent.

But prices skyrocketed when the Reserve Bank cut the official cash rate to a record low of 0.25 per cent and temporarily removed loan-to-value (LTV) ratios.

Canada, the US and the UK also had significant price increases since the start of the pandemic. But prices in 48 per cent of markets rose by more than 10 per cent annually, up from 13 per cent pre-pandemic.

Prices in 54 of the 56 countries monitored increased year-on-year (YOY), with Malaysia and Morocco the only exceptions. Globally, prices rose by 9.4 per cent on an annual basis in the three months to September.

Knight Frank researcher Kate Everett-Allen said despite the boom times there were signs the rate of growth might have peaked in some parts of the world.

Annual price increases moderated in 18 countries between June and September this year, she said.

Among them are some of the strongest performers: New Zealand, the US and the UK. Here, interest rate hikes, changes to property taxes and affordability concerns are contributing to slower rates of growth, she said.

Prices in New Zealand increased 21.9 per cent in the three months to September, which put it at number three in the rankings, behind Turkey on 35.5 per cent and South Korea on 26.4 per cent.

Australia was ranked fifth with price increases of 18.9 per cent, while the US was sixth on 18.7 per cent and the UK was at 21 with 11.8 per cent.

But New Zealand had dropped in the rankings, after consistently being in second place this year, and the rate of price rises had slowed from 25.9 per cent in the previous three-month period.

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