Property prices continued to fall in New Zealand in August while supply increased in response to the Reserve Bank’s aggressive interest rate hikes.

Last week, the TradeMe property index was released, which showed that New Zealand house prices fell by 1.2% in August, with values down 6.2% year-on-year. The decline in house prices came at the same time as the number of properties for sale across New Zealand soared 76% year-on-year, according to TradeMe.

Commenting on the result, Trade Me property sales director Gavin Lloyd noted that listings “have been on an upward trajectory all year and currently supply is well above pre-pandemic levels. Last month marked the third month in a row where we saw listing numbers spike by more than 50% year-on-year”.

The decline in New Zealand house prices has arisen on the back of a collapse in mortgage demand in response to the Reserve Bank’s aggressive rate hikes. New mortgage commitments plummeted 30% in the year to August, a sharp turnaround from the explosive 128% growth recorded a year prior.