House price slide predicted
Sunday 23 May 2004
An active government sector will cushion Wellington from an expected house price slowdown, but values elsewhere could drop up to 8 per cent in the next two years, a new forecast says.
By The LandlordHouse prices are peaking and there will be a marked slowing in the real estate market this year, the report says.
Prepared for mortgage insurer PMI by economic consultancy Infometrics, the report says lower migration and less buoyant conditions will curb house price rises, which have averaged 19 per cent nationally this year.
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Periods of house price decline are rare and "short-lived", says economist Tony Alexander, amid forecasts of a drop of 10%-15% this year.
The Reserve Bank says the commercial property sector is vulnerable to the Covid-19 crisis. But PMG Funds' chief executive believes that while there’ll be short-term pain, the biggest long-term impact will be structural change.
Mortgage lending fell to its lowest level on record last month as the property market ground to a halt during the Covid-19 lockdown.