I reported yesterday how realestate.co.nz registered heavy house price falls across New Zealand, with the national average asking price of properties listed for sale plunging 8.8% from its January peak.
The falls have been even steeper across Auckland, where the average asking price has tanked 11.9% from its January peak.
In a similar vein, auctioneer Barfoot & Thompson had one of its worst July’s ever for sales, with the median selling price plunging $130,000 from its November 2021 peak of $1,240,000.
Today, CoreLogic reports that New Zealand house prices are plunging at their sharpest pace since the Global Financial Crisis in 2008, with values falling across all six major regions in July:
The national measure of property values fell a further -0.9% in July, taking the three month drop in values to -2.5%, the largest quarterly fall since October 2008 (-3.4%)…
Each of Aotearoa’s six main centres recorded value falls over the month…
“Housing affordability remains significantly stretched despite values falling, with the combination of high prices, following a significant upswing in values, and increasing interest rates restricting the number of buyers who are able, let alone willing, to borrow the sums of money required to buy property”…
“Loan-to-value (LVR) restrictions also sit at their tightest setting on record, with banks remaining below the allocated 10% speed limit. The increase in listings on the market over the past year or so has also switched pricing power towards buyers.”
The Reserve Bank of New Zealand last month stated that it would continue to hike interest rates to contain inflation, which hit a 32-year high 7.3% over the June quarter. Accordingly, New Zealand house prices will continue to fall.
The upshot is that after experiencing one of the world’s biggest price booms over the pandemic, New Zealand housing is now facing one of the biggest busts.
- Weekend Reading: 13-14 August 2022 - August 13, 2022
- Soaring interest rates trap Aussies in ‘mortgage prison’ - August 12, 2022
- FWO launches action against university wage thieves - August 12, 2022