According to the latest monthly QV House Price Index it seems that the annual rate of home value growth has slowed as the LVR has taken effect. The Loan to Value ratio (LVR) is the amount of your loan compared to the value of your property. The LVR is calculated by dividing the amount of the loan by the value of the property. To help slow the market the Reserve Bank has instructed the banks to restrict the LVR to 80 per cent lending on owner occupied properties and 60 per cent on investments.
During October nationwide residential property values increased by just 12.7 per cent over the last year – this is the slowest rate since May. Overall values have risen by 3.3 per cent over the past three months. They are now 50.2 per cent above the previous market peak of late 2007. Take into account inflation and the nationwide annual increase drops to 12.4 per cent with values 27.4 per cent above the 2007 peak. The average value nationwide is now $622,309. In Auckland the average is $1,013,632!
There’s been a slow start to the spring selling season. Real Estate Institute of New Zealand sales figures show 22,223 residential property sales in the third quarter of this year, down 7.6 per cent compared to the same period of last year.