New Zealand’s house price index has fallen by 8 per cent in January and is now just below the midpoint of the index, according to new data from the Reserve Bank.
The NZD is up 4.1 per cent to 6,902.24 and is below the NZD’s long-term trend of 6,987.36.
It is down by 8 percentage points since February and the RBA said the trend of falling house prices was unlikely to reverse any time soon.
House prices fell 8.5 per cent across the country last month, while property prices fell 2.1 percent, according a report from the RBC.
That means the annual average increase in house prices in New Zealand has fallen 7.3 per cent from the same month a year ago.
Auckland house prices fell by 5.6 per cent and Auckland property prices dropped by 1.2 per cent, while Wellington house prices increased by 5 per cent.
RBC said Auckland house prices have fallen the most since the 2008 financial crisis, when prices were about 25 per cent higher than they are now.
Meanwhile, Wellington property prices rose by 7.2 percent, Auckland property rose by 3.4 percent, and Auckland prices were down by 3 per cent for the month.
“The overall housing market in New York and Los Angeles remains in a fairly strong position, and it’s still not quite enough to support a household or a household-sized business,” RBC economist Ian Bremmer said.
Bremmer added that the average price of a single house in the US increased by 1,000 units last month.
The RBA is expected to release its quarterly housing report in the coming days.
NBN Co said prices have been steadily increasing for many years, with the last three quarters of 2015 the highest ever.
But prices are likely to fall this year and the government is likely to reduce subsidies for homes that fall below market value.
This means homes that have fallen below market-value will be eligible for a rebate.
New Zealanders are paying a total of $2,764 for a house in Auckland, according the RSB.
On a per-square-foot basis, Auckland house price rose by 1 per cent last month compared to the previous year.
And the average rent in Auckland was $1,918, down 1.1 percentage points from the previous month.
Auckland home prices are down from a year earlier, but the RBS expects they will recover in the next few years.
If Auckland is to achieve a return to the average house price in 2020 and beyond, it will have to continue to keep pace with population growth, which is set to continue, the RBR said.