The latest data from the Real Estate Institute of New Zealand (REINZ) showed that house prices nationally have fallen by 16.4% over 44 months, with all major centres experiencing heavy declines.
As illustrated below by Justin Fabo from Antipodean Macro, home prices in real terms have crashed back to 2019 levels.
Cotality released its house price results for July, which showed that values nationally declined by 0.2% over the month to be down 0.4% year-on-year.
Source: Cotality
Values nationally have declined 16.6% from their peak, led by a 21.7% decline in Auckland and a 24.7% fall in Wellington.
Source: Cotality
Cotality NZ Chief Property Economist Kelvin Davidson said that the market was being held down by “job market uncertainty”, which has more than offset “the upwards influence on house prices from lower mortgage rates”.
The upshot is that New Zealand housing is becoming rapidly more affordable.
As illustrated below by Fabo, New Zealand’s median house-price-to-income ratio has fallen to decade lows:
Mortgage repayment affordability has also fallen to a decade low:
Meanwhile, the rental market has also become more affordable, partly reflecting the collapse in net overseas migration to 2.5-year lows:
Both CPI rental inflation and actual rents have collapsed:
Source: Cotality
As a result, New Zealand housing is becoming rapidly more affordable—both to purchase and rent.
It’s a shame Australia has not followed a similar path.
