The Real Estate Institute of New Zealand (REINZ) has released its house price results for April, with median prices declining another 1.7% over the month to be 4.9% lower than November 2021:
New Zealand house prices are falling.
In dollar terms, the median New Zealand house price has declined by $45,145 from its November 2021 peak, from $920,145 to $875,000.
The declines have been led by Auckland, where house prices fell 2.5% over the month to $1,170,000 and are now 10% ($130,000) below the city’s November peak of $1,300,000.
Sales volumes have also plummeted, down 30.1% year-on-year across New Zealand:
Property sales volumes have plummeted across New Zealand.
Commenting on the results, REINZ CEO Jen Baird noted:
“We’re now in the phase of the property cycle where demand has weakened, sale counts are down but prices remain high. We’re seeing a slowdown in activity, there is more stock staying on the market for longer, and while annual price growth is more moderate, the month-on-month trend shows a fall in median prices…”
“Falling attendance at open homes and auction rooms, and a decrease in buyer enquiries were reported across New Zealand… Affordability, uncertainty and changing financial conditions remain primary concerns. Tighter lending criteria, LVRs, and increasing interest rates coupled with inflation…”
“Increases to the OCR, most recently by 0.5% in April, have further impacted affordability, and with the cost to own increasing, property may seem less attractive…”
“Fear of overpaying has overtaken fear of missing out, as potential buyers take the time to consider the financial environment and their increased options on the market”.
The REINZ’s latest agent’s survey, released earlier this month, was even more bearish. Real estate agents noted that fewer people are attending open homes and auctions, with a record 60% of agents also reporting that prices are falling in their areas of operation:
New Zealand buyer demand evaporates.
Agents also reported collapsing demand from investors and first home buyers, alongside a near complete disappearance of FOMO in the market.
Clearly, the New Zealand house price collapse has begun. How far prices fall will depend on how aggressively the RBNZ lifts interest rates.
