House price fall of 5pc tipped for next year
Tuesday 13 July 2004
It may pay to hold off buying a home till next year. House prices are overvalued and may fall 5 per cent next year, according to a study by Westpac Bank.
By The Landlord
However, the bank's economists say most of the recent house price boom has been justified, mainly by a big migration boom. House prices rose about 22 per cent in the year to March."A boom, yes, a bubble ready to crash...not likely," Westpac Bank economists say.
On average, the housing market is 10 per cent "above fundamental valuation", the bank says in a report just out. That is a bigger "over-valuation" than at any time in the past 20 years, but there was no evidence of a bubble.
Prices would keep rising this year, by about 5 per cent, but then fall as much next year, before moving sideways.
"You may be able to pick up a property cheaper next year," the report says.
A recent report in The Economist magazine suggested there could be an across-the-board fall of as much as 15 per cent, though most bank economists favour a smaller dip – some say 5 per cent or 10 per cent at most.
Read More - Opens in a new window
Commenting is closed
House Prices
No stopping Capital price rises
There’s no sign of a slow-down in Wellington’s property prices with Trade Me Property’s latest data showing that asking prices continue to rise solidly.
Commercial
NZ proptech start-up scores major investor
Auckland-based commercial property disrupter, Jasper, has raised $2.3 million in seed funding following investment from European asset manager M7 Real Estate.
Mortgages
LVR limits slow down investors
LVR speed limits continue to have a "strong effect" on investors, according to CoreLogic, after the latest Reserve Bank data showed a drop in investor borrowing.
