Article by Steven Walton for stuff.co.nz.
Early signs suggest growth in Canterbury house values is likely to slow this year and potentially even flatten, according to property valuation experts Quotable Value (QV).
Canterbury’s housing market has come off a booming year in 2021, where it was the fastest growing region nationwide.
In Christchurch, the value of an average house jumped by 40.2 per cent in 12 months, according to QV.
QV property consultant Olivia Brownie said while 2022 would likely start with continued growth in the region, there were signs that it would not last.
“There are early signs that this value growth will eventually slow and perhaps flatten as the year continues,” she said.
How much the value of Canterbury homes jumped during 2021
The main signs were rising interest rates and tightening of credit, Brownie said.
She said first home buyers were affected by new lending rules introduced in December, which were aimed at protecting vulnerable borrowers.
“We’re getting feedback from agents that they’ve just struggled to get finance and/or have pulled back, which is taking a number of buyers out of the market,” she said.
Properties failing to sell at auctions are also becoming more common, she added.
Brownie said a pipeline of new-build homes would also slow market growth in 2022.
“The imbalance between supply and demand should sort of change a little bit,” she said.
Brownie said Canterbury’s market saw “considerable growth” during 2021, and not just in Christchurch.
According to QV, Selwyn’s average house value grew by 43.3 per cent during 2021, while Waimakariri’s grew by 41 per cent – both more than Christchurch, which grew by 40.2 per cent.
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