New Zealand’s home prices dropped to the lowest in more than five and a half years in September, prolonging a slump that began in early 2022 and clouding the outlook for domestic demand as a driver of economic recovery. The Home Value Index declined 0.3% from August to the lowest since January 2021, property consultancy Cotality said Thursday in Wellington. Prices have fallen 1.3% the past 12 months and are now 19% below their January 2022 peak.
The result will weigh on consumer confidence, adding to the pressure on households already grappling with surging fuel costs and rising unemployment, and is likely to keep consumer spending subdued. The erosion of household wealth may also add to voter discontent ahead of the November election.
“Economic uncertainty remains a key factor weighing on confidence across the broader housing market,” said Kelvin Davidson, chief property economist at Cotality. The housing downturn is expected to be much longer than after the Global Financial Crisis. The Treasury Department this week downgraded its near-term forecasts, now seeing prices rising 0.6% in the 12 months through June 2027, sharply lower than the 4% growth projected in May’s Budget.
The RBNZ is expected to raise interest rates at least once more this year. Elevated home-loan interest rates, economic uncertainty and a high level of available listings are likely to keep a lid on property value growth for some time, Davidson said.
Sumber: Bloomberg Markets · Diringkaskan oleh HeadlinesBriefing