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Wednesday, 18 January 2023
The Real Estate Institute of New Zealand’s (REINZ) December 2022 figures show house prices are still declining, with properties taking longer to sell across New Zealand.
REINZ Chief Executive, Jen Baird says prices continue to ease but the pace of the decline is slower, and the market has settled at its new pace.
“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.
“Buyer caution is evident in the drop in count of sales, down 23.6% month-on-month and down 39.0% 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% increase in inventory – now sitting at 26,057 properties.
“With interest rates rising and banks stress testing at 8.1-8.5%, 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.”
“The median sale price has decreased nationally by 12.2% overall to $790,000 and decreased 7.9% for New Zealand excluding Auckland to $700,000. The REINZ House Price Index (HPI) showed an annual decrease of 13.7% 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 means 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% and Taranaki 5.1%. These were the only regions to see a rise in median price compared to December last year.” Wellington is now into its 14th consecutive month of being in the bottom two ranked regions for the year-onyear House Price Index movements.
“Salespeople around the country say sellers are tending to be more realistic and will usually meet the market through negotiation - although it’s taking longer to sell, sellers are still getting results.” Baird suggests that for some buyers, now is a great time to be in the market.
“If you can make the finances work, this is a good time to be a buyer. More stock, less competition and prices continuing to ease, will allow those who can get all the ducks in a row to buy well.”
“Northland was one of two regions in Aotearoa that saw an annual increase in its median price in December 2022 — up 3.3% to $785,000. Kaipara District reached a record median price of $1,100,000. Owner occupiers continue to be the most active buyer group and properties in the higher price brackets are maintaining value. There was an increase in first home buyer interest, though not all resulted in sales. Investors remain on the fence, driven by uncertainty around rising interest rates and the expectation that prices will continue to ease.
“Some vendors are still hoping for a premium price, but new and genuine vendors are taking the price adjustment in their stride. Fear of overpaying amongst buyers is still very much real in Northland’s market.” (REINZ)
The current Days to Sell of 42 days is less than the 10-year average for December which is 43 days. There were 35 weeks of inventory in December 2022 which is 19 weeks more than the same time last year.
“Tāmaki Makaurau’s median price decreased by 18.0% annually to $1,050,000 in December 2022. Whilst owner occupiers were the most active buyer group in Rodney, both owner occupiers and first home buyers were evident in the South and West Auckland markets.
“Open home attendance was subdued throughout the city as people put their buying and selling plans on hold over the Christmas period, in conjunction with poor weather.
“Sales counts continue to ease — down 45.1% compared to December last year. However, December 2021 saw Auckland coming out of an extended period of COVID-19 restrictions which led to an influx of market activity during a typically quieter month.” (REINZ)
The current Days to Sell of 39 days is more than the 10-year average for December which is 33 days. There were 34 weeks of inventory in December 2022 which is 20 weeks more than the same time last year.
"In December 2022, the median sales price in the Waikato was down 11.7% annually to $750,000. However, it’s important to bear in mind that December 2021 was busier than usual with COVID-19 restrictions easing, leading to a flurry of activity that month.
Sale volumes also saw a decrease of 42.6% when compared to this time last year. Adding to this slower pace of sales are buyers acting with caution. Many are concerned about further increases to the Official Cash Rate (OCR), rising interest rates, and where our economy is headed in 2023." (REINZ)
The current Days to Sell of 52 days is much more than the 10-year average for December which is 35 days. There were 36 weeks of inventory in December 2022 which is 24 weeks more than the same time last year.
“In Bay of Plenty, median prices decreased 5.1% year-onyear to $875,000 in December. Rotorua salespeople report first home buyers as the most active buyer segment and in Tauranga first home buyers, owner occupiers and out of town buyers were engaged.
“Open home attendance was light given the time of year, but new stock in good locations attracted satisfactory interest. Throughout the Bay of Plenty the cost of living, the concern of further rises to interest rates, and a lack of new listings (down -26.3% annually), are causing hesitation amongst buyers, adding to a slower pace of sales. In December, the median days to sell increased by 22 days.
“Salespeople hope that an increase in activity in January and February from buyers and sellers making decisions over the holiday period ensues.” (REINZ)
The current Days to Sell of 52 days is much more than the 10-year average for December which is 38 days. There were 31 weeks of inventory in December 2022 which is 21 weeks more than the same time last year.
“The median price in Gisborne was down 17.3% year-on-year to $575,000. Owner occupiers wanting to secure a property before Christmas were most active in the market. Investors are waiting for distressed sale opportunities.
“Gisborne salespeople say that concerns around rising interest rates are having the biggest impact on market activity. Buyers are becoming more selective with what they are prepared to pay. The number of sales in December decreased by 60.0% annually. Local salespeople predict that further rises to interest rates may initiate an increase in quick sales to relieve mortgage pressure later this year.” (REINZ)
The current Days to Sell of 46 days is much more than the 10-year average for December which is 33 days. There are 24 weeks of inventory in December 2022 which is 17 weeks more than last year.
“Hawke’s Bay saw its median price decrease 13.8% annually to $700,000. Local salespeople say there was a flurry of market activity at the beginning of the month which eased nearer to Christmas. Vendors are adjusting their price expectations as necessary, and open homes had lower attendance but were steady.
“The number of sales in December were down 31.8% annually — a result of the festive season, economic uncertainty and the rising cost of living — impacting on people’s decision to purchase.” (REINZ)
The current Days to Sell of 45 days is much more than the 10-year average for December which is 34 days. There were 28 weeks of inventory in December 2022 which is 19 weeks more than the same time last year.
“Taranaki was one of two regions to experience an increase in its median price in December — up 5.1% annually to $620,000. Salespeople report a lack of urgency amongst buyers, and limited numbers of first home buyers due to rising interest rates and the cost of living.
“Vendors appear to be listening to salespeople’s advice that achieving a premium price is no longer likely — many are now more realistic in their expectations.
“Like all regions in New Zealand, Taranaki’s market experienced an easing of sales — down 34.7% annually. This is largely due to a lack of urgency and a cautious approach among buyers. Taranaki salespeople say that in previous years activity continued in the days leading up to Christmas, whereas in December 2022 it was more subdued. An increase of market activity is expected to occur nearing the end of January.” (REINZ)
The current Days to Sell of 34 days is more than the 10-year average for December which is 31 days. There were 24 weeks of inventory in December 2022 which is 17 weeks more than the same time last year.
“Manawatu/Whanganui had 13.9% decrease in its median price year-on-year to $557,000 in December 2022. Local salespeople say that buyer activity was low due to people prioritising Christmas and plans with family rather than purchasing plans.
“Rising interest rates have had a significant impact on the Manawatu/Whanganui market, as well as the difficulty to secure finance — some approvals now taking up to three weeks. This has contributed to the extended time properties are spending on the market — up 15 days from 26 days in December 2021 to 41 days in December 2022.” (REINZ)
The current Days to Sell of 41 days is more than the 10-year average for December which is 32 days. There were 27 weeks of inventory in December 2022 which is 17 weeks more than the same time last year.
“The median price in Wellington was down 20.2% annually to $790,000 in December 2022. It was a quiet month for market activity in the capital which saw low attendance at open homes and auctions.
“First home buyers are putting their feelers out there for bargains — if they can secure a loan.
“The fear of a looming recession and rising interest rates is impacting market activity. However, Wellington salespeople say this is part of the cycle and that the next couple of months will provide further insight into what’s to come this year.” (REINZ)
The current Days to Sell of 43 days is much more than the 10-year average for December of 30 days. There were 22 weeks of inventory in December 2022 which is 13 weeks more than the same time last year.
“Median prices in the Nelson, Marlborough and Tasman regions decreased in December 2022 by 11.7%, 1.0% and 14.1% to $715,000, $693,000 and $795,000 respectively. In Marlborough, the most active buyers were owner occupiers, and in Nelson out of town buyers and owner occupiers downsizing dominated the market.
“Rising interest rates are making purchasers cautious, and difficulty securing finance remains a barrier for many buyers. These factors, as well as the time of year, added to the slower market pace in December. In Nelson, Marlborough and Tasman the count of sales was down 31.8%, 36.5% and 29.2% annually. Properties are also taking longer to sell. In Nelson, the median days to sell increased by 30 days from 21 days in December 2021 to 51 days in December 2022.
“Local salespeople await January and February as this is typically when the region sees an influx of national and international interest.” (REINZ)
The current Days to Sell of 46 days is much more than the 10-year average for December which is 31 days. There were 24 weeks of inventory in December 2022 which is 17 weeks more than the same time last year.
“The median price in the West Coast region was $370,000 in December 2022, the same is it was in December 2021. It was a quiet month for market activity on the Coast, with a noticeable slowdown in sales counts — down 52.8% yearon-year.
“Hokitika led the way with high values and a 133.3% annual increase in its sale count — albeit a small sample size of 7 sales (up from 3 in December 2021).
“With a great run of fine weather, visitor numbers appear to have grown substantially and local salespeople are hopeful of renewed interested in the coming months.” (REINZ)
The current Days to Sell of 44 days is much less than the 10-year average for December which is 74 days. There were 36 weeks of inventory in December 2022 which is 20 weeks more than the same time last year.
“Canterbury’s median price decreased 3.7% annually to $655,000 in December 2022. Owner occupiers were active in Timaru and Ashburton, and in Christchurch first home buyers and investors were active to a degree, but cautious. There are buyers looking but limited serious interest.
“As expected, attendance at open homes was light. Auction numbers were steady in December and some properties had strong bidding and multiple bidders. The properties that weren’t sold in the room were priced relatively quickly and sold soon after.
“Interest rates have made purchasing a property more challenging. Labour and construction shortages risk slowing the construction of new builds. Land sales have eased as have sales of new builds and apartments. Higher-end and lifestyle properties remain steady with buoyant activity at times.” (REINZ)
The current Days to Sell of 33 days is more than the 10-year average for December which is 31 days. There were 18 weeks of inventory in December 2022 which is 11 weeks more than the same time last year.
Dunedin: “Dunedin’s median price was down 7.0% in December 2022 to $600,000. Buyer activity leading up to Christmas was relatively busy but with the onset of the festive season, activity soon dampened as expected. Most buyer segments were active in the market, but numbers of investors were light due to tax legislation.
“Struggles with securing finance have seen less buyers ready to act and therefore less interest in auctions. Whilst sales counts decreased 34.2% annually, local salespeople report more people wanting to secure a mortgage now to take advantage of the lower prices we are seeing. However, strict finance requirements are a hindrance to some of those buyers wanting to achieve just that.”
Queenston: The median price in the Queenstown-Lakes District saw an annual decrease of 7.0% to $1,232,000. Local salespeople say that open home attendance was sporadic over the Christmas and New Year period — usual for this time of year.
“There was still strong interest from buyers outside of the region, but most are acting with a level of caution. Vendors are aware of this, and unless they are highly motivated to sell, they are not prepared to reduced price expectations.
“Whilst the market is slowing and prices are easing, the Queenstown-Lakes District and Wanaka remain an attractive option with continued buyer enquiry nationally and from abroad.” (REINZ)
The current Days to Sell of 42 days is much more than the 10-year average for December which is 31 days. There were 24 weeks of inventory in December 2022 which is 14 weeks more than the same time last year.
“Southland saw its median price decrease 4.9% in December 2022 to $432,600. There is an evident decline in investors who have been negatively impacted by the bright-line test, tax legislation and an increase in people leaving the country.
“Banks’ lending criteria, rising interest rates and tax legislation have created hesitation and caution within the Southland market. Buyers are taking longer to decide which is adding to the length of time properties are spending on the market — up 16 days annually. Sales counts were down 34.3% — largely due to the reasons listed above as well as the quieter time of year.”
The current Days to Sell of 38 days is more than the 10-year average for December which is 31 days. There were 18 weeks of inventory in December 2022 which is 10 weeks more than the same time last year.
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