Property market softens: QV

Average annual growth in house prices eased to 15.3% in February, lower than both the 16.8% annual growth shown in January and the 15.8% increase in December. However, that's still well above the 12.1% increase recorded in March last year.

QV spokesman Blue Hancock says the figures reflect anecdotal evidence of softening demand and less pressure on prices.

"An annual growth in property values of 15.3% is still very strong, and although the growth rate has dropped slightly, the decrease is not at a level that would suggest any dramatic change in the market," Hancock says.

The QV figures are prepared on a three month rolling average basis. ASB Bank chief economist Anthony Byett says because of the lag in QV being informed, the latest figures reflect sales which actually occurred in October, November and December of last year.

"We know there was a lot of housing activity before October and then it started to slow down," Byett says.

The Reserve Bank started raising interest rates again in October after holding steady since March last year.

The QV figures show annual house price inflation decelerating slightly in all the main centres. For example, Hamilton's average annual growth eased to 25.4% in February from 25.4% in January, Christchurch's eased to 17.5% from 20.8%, Wellington's to 13% from 13.3%, Auckland's to 10.5% from 11.4% and Dunedin's to 9.8% from 10.4%.

While most of the other major provincial cities seem to be following the national trend, Rotorua was a major standout with annual growth accelerating to 32% in February from 31% in January.