House prices in New Zealand have dipped in January from the levels of December due to various factors, reports say.
Recent data from Real Estate Institute of New Zealand (REINZ), as per Nasdaq, shows a decline in house prices and sales in the country, with the national median down 3.7 percent in January from December's figure. While the drop seems significant, it does not come as much as a surprise because January has traditionally been an odd month for the real estate sector. This is because it follows the Christmas and New Year holidays, as well as summer breaks.
"January typically has a significant drop in sales volume and a noticeable drop in median prices compared to December," said REINZ Chief Executive Colleen Milne. "That said, over the past 10 years the average drop in sales volume for January has been close to 20 percent, while there has been an average 3 percent drop in the median price nationally."
QV House Price Index also reported the same trend with its recent data showing a 0.3 percent fall in nationwide property values for January to $556,206. This may be due to investors pulling out of the market and the growing demand for affordable, newly built or off-the-plan homes among first-time buyers, New Zealand Herald reports. Likewise, the market is softening because of new regulatory policies introduced last year, as well as the restrictions on capital flow from China to other countries.
The decline in national figures can also be attributed to the cooling market of Auckland. As per QV's data, the region saw a 0.5 percent drop of home values in January to $928,921, its first drop for more than a year. Meanwhile, on an annual basis, New Zealand house prices increased by 13 percent compared to the previous year, while Auckland's home values is up by 20 percent.
