The Real Estate Institute of New Zealand’s (REINZ) December 2022 figures showed that house prices are still declining, with properties taking longer to sell across the country.
REINZ Chief Executive Jen Baird said on Wednesday that New Zealand house prices continue to ease but the pace of the decline is slower, and the market has settled at its new pace, reports Xinhua news agency.
“We usually see a slowing of activity as we head into the festive season, and we are comparing this December to one that was right at the peak of the pandemic market,” the chief executive said.
“Buyer caution is evident in the drop in count of sales, down 23.6 per cent month-on-month and down 39.0 per cent annually from December 2021. Comparing this activity to the long-term trend, we can see the current market is weaker than this trend. This is leaving a lot of choice for buyers with a 55.3 per cent increase in inventory — now sitting at 26,057 properties.”
“With interest rates rising and banks stress testing at 8.1-8.5 per cent, buyers’ ability to secure finance and service a mortgage remains a key driver to buyers taking their time. As a result, properties are spending longer on the market with 40 being the median days to sell, 11 days longer compared to December 2021,” Jen Baird said.
“The median sale price has decreased nationally by 12.2 per cent overall to NZ$790,000 and decreased 7.9 per cent for New Zealand excluding Auckland to NZ$700,000. The REINZ House Price Index (HPI) showed an annual decrease of 13.7 per cent in the value of residential property nationwide which is in line with the sale price changes we are seeing.”
“Again, cheaper prices coupled with more choice for buyers mean sellers have to be realistic about their price and timing expectations.”
Regional median house prices have decreased across the board except for Northland which saw an increase of 3.3 per cent and Taranaki 5.1 per cent. These were the only regions to see a rise in median price, said Jen Baird.
Wellington is now into its 14th consecutive month of being in the bottom two ranked regions for the year-on-year House Price Index movements.