House prices continue to fall in New Zealand, not because of foreigner ban – Idealista/news

House prices in New Zealand continued to fall in January amid expectations that the central bank will continue to raise interest rates aggressively to control inflation and prevent the economy from slipping into recession. Prices fell 7.2% in January from a year earlier, the biggest year-on-year drop since May 2009, according to CoreLogic New Zealand. The country was launched In 2018 it banned non-citizen foreigners from buying real estate Thinking that they are guilty of price rise. Now the houses are depreciated by inflation.

Values ​​fell for the tenth month in a row, down 0.3% from December. The average house price fell to NZ$953,850 (US$617,000).

“In November, the Reserve Bank released its gloomy outlook for both the economy and inflation, which will weigh on home values ​​in the coming months,” said Kelvin Davidson, chief housing economist at CoreLogic. “Buyers continue to be at the forefront of setting prices, which has led to a further decline in prices in January.”

At the end of November, the country’s central bank (RBNZ) raised the official interest rate by 75 basis points to a record 4.25%, and expects the benchmark to reach 5.5% this year, which will cause contraction of the economy.

With inflation coming in lower than expected in the fourth quarter, investors are less optimistic that the central bank will need to raise rates that much. However, key labor market data to be released on Wednesday will show record wage inflation, which economists say will make the RBNZ’s next decision on February 22 again a choice between a 75-point increase or a 50-point cut.

Although home loan interest rates are rising in response to the RBNZ’s tightening, the full impact is yet to be felt as many New Zealand households have yet to switch fixed-rate mortgages to the new, higher rate. The two-year average rate stood at 6.6% in December, up from 4.25% a year ago, according to RBNZ data.

As a result, economists predict House prices will continue to fall through 2023 and will be at least 20% below their peak in early 2024. Achieved by the end of 2021.

In the capital Wellington, prices are already down 18.1% from a year ago, according to CoreLogic data released today. In the largest city, Auckland, prices fell by 8.2% in a year.

House prices in New Zealand fall with inflation, and foreigners are not barred

The country came into effect in August 2018 with a law restricting foreign investment in housing with some exceptions. He was blamed for the rise in housing prices, which saw a 60% rise between 2008 and 2018. This new this new regulation has been revised The Foreign Investment Act, 2005 is in force in the countryThis favored the influx of investors from all parts of the planet.

For more than five years, any international investor must obtain approval Office of Foreign Investment You can buy real estate in New Zealand. This investment is limited to new construction, purchase of apartment buildings and some real estate projects. as AustraliaNon-citizen foreigners can only buy new houses, buying old houses is prohibited, with heavy fines and even jail time for breaking the law.