Fresh figures out today from OneRoof and Valocity show house price growth in New Zealand is slowing.
The median property value for the country hit a record high of $791,000 in July - a jump of 21 per cent on the year before - but the pace of growth in the last quarter eased to 5.5 per cent.
Wayne Shum, senior researcher at OneRoof's data partner Valocity, points out the main drivers of house price growth in New Zealand remain in place.
"Buyer demand is still high, listing volumes are low, and have been for some time, and there is a shortage of new homes in many of the main centres. More importantly, interest rates are still low," he said.
Headwinds face the market, however, and these may accelerate the slowdown experienced in the past three months. The Reserve Bank has announced it is halting its monetary stimulus programme and the market is now pricing in rate rises on the back of August's expected increase in the official cash rate (OCR).
It does appear investors have taken a step back post the reintroduction of LVRs, and the Government's changes may or may not be a part of that. But it is clear landlord threats to leave the property sector hasn't resulted in droves of abandonment.
Investors with one or two properties are unlikely to be changing course and those with larger portfolios will sell some of the lesser-returning properties but remain heavily involved in the market. None of the changes have entirely quelled the appetites although some will direct more of their investments at new builds in light of the incentives.
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But it would appear most large investors have the properties they want and are sitting back to see where the market goes next.
It is clear first-home buyers have increased a share in the market and this is particularly being seen in suburbs which were considered less desirable in the past. Pressure will continue in these areas. This has been at least a partially success for those wanting more equity in the housing sector after first-home buyers had been increasing shut out for some time.
However, it should be noted that housing stock hasn't largely improved for this increased value. An Auckland house selling for $3 million now, which changed hands for $1 million five years ago, is largely the same house. What has had an effect is continued low levels of listings which has intensified interest in what has come on to the market.
From here, it seems the Reserve Bank will hike the OCR and that will flow on to banks. Those who hadn't raised their interest rates inevitably will. Those who had will also adjust further.
This is likely to further dent the market at a time that spring traditionally brought a lift to listings and to pressure on prices. Over the past few years however, we have seen less of this seasonal movement.
Another potential outcome of the OCR hike is the pressure on those who have reached too far to grab a rung of the property ladder. The risk of the return of mortgagee sales and the investor scramble for bargains could turn the heat back up again.