The Real Estate Institute of New Zealand (REINZ) has released its July survey of licensed real estate agents, which is wall-to-wall bearish and points to further heavy price falls for the nation’s housing market.
Below are key indicators presented in the survey.
First, a net 61% of responding real estate agents said they are seeing fewer people attending auctions, whereas a net 58% of agents reported seeing fewer people attending open homes:
New Zealand’s median house price has already fallen 9.2% from its November 2021 peak. And a record 72% of real estate agents are seeing prices decline in their areas of operation. This is a massive turnaround from eight months ago when a net 70% of agents reported that prices were rising:
A year ago, Kiwi buyers were gripped with FOMO (‘Fear of Missing Out’). However, FOMO has all but evaporated with agents reporting only 4% of buyers showing FOMO:
In a similar vein, agents are reporting tanking buyer interest across the board spanning first home buyers, investors and overseas buyers:
Finally, rising interest rates continues to be the number one concern facing Kiwi buyers, according to real estate agents:
Commenting on the survey, author Tony Alexander noted:
There are many negative forces in play in the housing market currently — ranging from 3% to 3.5% increases in fixed mortgage rates, shortages of credit, shortages of construction staff and materials, net negative migration outflows, collapsed FOMO and soaring FOOP (fear of over-paying). The impact so far is an 86% rise in the stock of property listings from a year earlier, a decline in annual sales from 100,000 to 76,000, and an average 7.7% fall in prices.
The results of our latest survey of licensed real estate professionals throughout New Zealand have shown conditions to be broadly as weak as they were last month. Certainly not stronger.
The Reserve Bank of New Zealand’s ‘forward track’ guidance indicated that the official cash rate will rise from its current level of 2.0% to 3.9% by June 2023.
If that happens, then housing sentiment will collapse even further and price falls will accelerate.