Market activity and prices continue to ease, first home buyers start to return to the market - REINZ stats July 2022
Tuesday, 16 August 2022
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Tuesday, 16 August 2022
Across New Zealand, median prices for residential property decreased 1.8% annually, from $825,000 in July 2021 to $810,000 in July 2022. Month-on-month, this represents a 4.7% decrease from $850,000 in June.
Jen Baird, Chief Executive at REINZ, comments: “The median property price across New Zealand decreased 1.8% to $810,000. This is the first decrease in annual median price movement for New Zealand overall since July 2011. Moving from June to July, we note a 4.7% decrease and indicating weaker performance than expected. the seasonally adjusted figures show a decrease of 2.8%,
“We saw a significant upswing in prices since the initial COVID-19 lockdown in early 2020, reaching a peak in November 2021. While the median property price is showing an annual decrease, affordability remains an obstacle for many — which is now being driven by rising interest rates, inflation and tighter lending criteria.
“In more affordable regions, we have continued to see significant growth compared to larger markets such as Auckland and Wellington. Buyer demand remains intact in Canterbury, and specifically Christchurch, reflected in the region’s strong performance over the past months.
“On the other hand, the Wellington market hasn’t fared so well. According to local agents, the number of attendees at open homes has fallen, days on the market have increased to 61 days in July 2022, and sales activity has eased. Stock is staying on the market for longer and the properties selling are those where vendors have met the market.
“Real estate markets are cyclical, after a period of strong upward movement, it is slowing. However, prices tend to decrease more slowly than they increase and after a period of stability, the market tends to regain momentum and median prices start their climb. We are in the easing part of the market cycle,” Baird says.
Those with the greatest annual percentage decrease were:
• West Coast: decreased 54.9% annually from 51 to 23
• Auckland: decreased 48.7% annually from 2,767 to 1,419
• Northland: decreased 44.0% annually from 243 to 136
• Waikato: decreased 43.5% annually from 742 to 419
Owner occupiers and those looking to retire dominate the buyer pool. Northland has overtaken popular retirement regions Tauranga and Mount Maunganui — which are now too expensive for some — thanks to its relative affordability and the lifestyle on offer.
In July, Northland’s median price increased 3.6% year-on-year to $725,000. Northland was also the top performing region in terms of year-on-year movement on the REINZ House Price Index (HPI).
The current Days to Sell of 58 days is more than the 10-year average for July which is 54 days. There were 37 weeks of inventory in July 2022 which is 26 weeks more than the same time last year.
“The Auckland region experienced a 5.6% annual decrease in its median price to $1,100,000. In Central Auckland, owner occupiers were most active in the market. In South Auckland, agents say first home buyers have started to resurface following recent Government initiatives, including tweaks to the CCCFA that came into force 7 July. Investors have backed away from the market due to the impact of tax legislation.
“Attendance at open homes was subdued — a result of less urgency amongst buyers, less competition and bad weather. Sales counts declined 48.7% annually as buyers wait for prices to ease further and securing finance remains a challenge. Vendors’ expectations were still high in July but are starting to soften as they gain a deeper understanding of the current market cycle.” (REINZ)
The current Days to Sell of 45 days is more than the 10-year average for July which is 35 days. There were 29 weeks of inventory in July 2022 which is 20 weeks more than the same time last year.
“Waikato’s median price increased 8.0% annually to $788,550 in July 2022. Waikato agents say owner occupiers were most active, and open home attendance has improved. In Taupo, open homes saw a larger number of attendees in part due to the school holidays and more visitors to the region. There have been some first home buyers enquiring and, to a lesser extent, investors. Attendance at auctions remains low, and 5.0% of sales were by auction this July compared to 21.4% in July 2021. Preferred methods of sale are price by negotiation or deadline sales.
“Many buyers still fear overpaying and are waiting for prices to decrease. On the other hand, some vendors still want to maximise on sales.” (REINZ)
The current Days to Sell of 47 days is more than the 10-year average for July which is 40 days. There were 28 weeks of inventory in July 2022 which is 21 weeks more than the same time last year.
“The median price in the Bay of Plenty increased 3.6% annually to $860,000. Attendance at open homes has varied due to school holidays and bad weather. According to local agents, properties at the upper end of the market had the best attendance. In Rotorua, July saw an increase in contracts subject to sale and conditional contracts falling through. Vendors understand current market dynamics and are adjusting their price expectations accordingly.
“Pre-approvals are still a significant barrier for buyers — particularly as sickness and staff shortages slow the application and approval process further. Properties took longer to sell — the median days to sell increased 26 days from 31 in July 2021 to 57 this July.” (REINZ)
The current Days to Sell of 57 days is much more than the 10-year average for July which is 46 days. There were 30 weeks of inventory in July 2022 which is 23 weeks more than the same time last year.
“Gisborne’s median house price increased by 0.6% annually to $629,000. The market has remained steady. However, headwinds such as lending criteria, inflation, and rising interest rates are causing hesitation amongst buyers and vendors.
“Vendors’ price expectations have moderated compared to the last few months. Supply outweighs demand — stock levels are up 131.7% on July last year, and new listings increased 16.7%.” (REINZ)
The current Days to Sell of 48 days is more than the 10-year average for July which is 45 days. There are 32 weeks of inventory in July 2022 which is 24 weeks more than last year.
“The median price in Hawke’s Bay increased by 1.2% annually, to $733,500. First home buyers still find it challenging to enter the market due to difficulty securing finance, which has contributed to a drop in sales, down 14.9% compared to July last year.
“Many buyers are concerned about further interest rate rises and inflation. New listings increased 26.7% — the highest increase of all sixteen regions, and agents expect listings to rise further in the next few months as we head into spring.” (REINZ)
The current Days to Sell of 60 days is much more than the 10-year average for July which is 39 days. There were 29 weeks of inventory in July 2022 which is 23 weeks more than the same time last year.
“The median price rose in Taranaki — up 15.9% on July 2021 to $620,000. Most buyer activity is driven by owner occupiers, with many offers being subject to sale. Agents say a good number of out-of-town buyers are actively looking in the Taranaki market — again, these offers are often subject to the sale of their existing property. First home buyers still appear to be struggling with finance.
“Confidence in the market is low, and staff shortages due to flu season have created a significant challenge for many Taranaki businesses. Supply outweighs demand — stock levels increased 117.7% compared to July last year. Agents expect increased market activity as the weather improves and days become longer. However, rising interest rates and lending criteria continue to be an obstacle — particularly for first home buyers.” (REINZ)
The current Days to Sell of 42 days is more than the 10-year average for July which is 37 days. There were 20 weeks of inventory in July 2022 which is 14 weeks more than the same time last year.
“Median price growth in Manawatu/Whanganui has eased — the region saw a 0.2% annual decrease to $585,000 this July. Attendance at open homes varied from property to property. New listings attracted reasonable numbers early on if pricing appeared competitive.
“Vendors are starting to understand that the market is undergoing a correction, and some reluctantly agree to price adjustments to remain competitive in a market with lots of choice for buyers. Other vendors have withdrawn their properties from the market after realising achieving the premium price is not unlikely. Increasing interest rates are causing concern amongst buyers despite some banks announcing small interest rate decreases.” (REINZ)
The current Days to Sell of 49 days is more than the 10-year average for July which is 42 days. There were 26 weeks of inventory in July 2022 which is 18 weeks more than the same time last year.
“Wellington saw a 5.9% annual decrease in its median house price — down to $809,100 this July. Agents note a small number of investors are beginning to enquire again, and an increase in high-end purchasers looking. First home buyers are scarce. Many buyers lack confidence in their ability to secure finance, and vendors are left frustrated by their inability to sell.
“Properties are sitting on the market for 28 days longer than they were this time last year — partly due to buyer uncertainty and tightened lending criteria. Agents are hopeful this will improve in spring.” (REINZ)
The current Days to Sell of 61 days is much more than the 10-year average for July of 38 days. There were 24 weeks of inventory in July 2022 which is 19 weeks more than the same time last year.
“Median prices in Nelson and Marlborough increased 16.3% and 0.4% year-on-year to $800,000 and $675,000 respectively. Tasman’s median price decreased by 4.6% year-on-year to $800,000. Agents in Marlborough note a shift in market sentiment due to employment and lending uncertainty. Where there is a motivated vendor, properties are selling; higherend properties remain the biggest sellers. Properties in the lower end of the market remain unaffordable for many first home buyers, and investors do not see ideal returns with rising interest rates.
“In Nelson, attendance at open homes was varied. Some saw multi-offer situations for residential and lifestyle properties. Many buyers are showing caution — they are being selective and hold strong when negotiating.” (REINZ)
The current Days to Sell of 37 days is less than the 10-year average for May which is 40 days. There were 19 weeksof inventory in May 2022 which is 8 weeks more than the same time last year.
“The median price rose steadily in the West Coast — 14.7% to $340,000 year-on-year. Median prices increased in the Buller District and the Grey District over the same period, with Grey District reaching a new record median of $390,000. Sales counts in the West Coast decreased by 54.9% — the greatest decrease of all regions, and properties spent an additional 41 days on the market compared to July last year.
“The number of new listings slightly increased, and vendors continue to hold higher price expectations than the market will meet.” (REINZ)
The current Days to Sell of 72 days is much less than the 10-year average for July which is 92 days. There were 28 weeks of inventory in July 2022 which is 14 weeks more than the same time last year.
“The median price in Canterbury increased 13.6% annually to $678,000 in July 2022. The Hurunui District reached a record median of $720,000. Owner occupiers were dominant in the market, and first home buyers are filtering back in again. Bad weather conditions had an impact on attendance at open homes and auctions.
Tighter lending criteria, rising interest rates and increased living costs due to inflation are having the biggest effect on the market. Stock levels are high — up 98.5% annually, requiring vendors to work harder to stand out from the rest. They are adjusting their price expectations to meet the market — many are very motivated to sell, particularly those who making life changes such as job relocations. Buyers from other regions are moving to the south, and Canterbury agents say North Islanders seeking a lifestyle move are supplementing their buyer pool.”
The current Days to Sell of 35 days is more than the 10-year average for July which is 34 days. There were 17 weeks of inventory in July 2022 which is 11 weeks more than the same time last year.
Dunedin City - “Dunedin’s median price decreased annually by 8.4% to $600,000. First home buyers and investors are still shying away from the market, whereas owner occupiers continue to dominate.
“Despite supply outweighing demand, sales counts in Dunedin increased 5.2% when compared to July last year. However, properties are taking longer to sell, with the median days to sell up 22 days compared to July 2021. More stock on the market has enabled buyers to take their time searching for the right property.”
Queenstown Lakes - Lakes District saw a 4.3% annual increase in its median house price to $1,200,000. On the other hand, Wanaka had an 8.2% decrease — down to $1,106,000. Owner occupiers were most active in the market, yet attendance at open homes was lower due to reduced buyer interest. Whilst there was a reduction of attendees at auctions, it remains a popular method of sale for many vendors as it determines value.
“The Central-Otago Lakes market is still experiencing a satisfactory sales volume due to ongoing confidence in the region. There has been a notable increase in out-of-town buyers showing interest. Agents expect new listings and buyer activity to increase in spring as usual.” (REINZ)
The current Days to Sell of 45 days is more than the 10-year average for May which is 40 days. There were 17weeks of inventory in May 2022 which is 7 weeks more than the same time last year.
“The median price in Southland increased annually by 0.4% to $421,500. Reports suggest many buyers fear overpaying; they are acting with less urgency and waiting for prices to decrease — adding to an annual decrease in sales counts of 24.1%. However, properties spent one day less on the market than this time last year, down from 34 days in July 2021 to 33 days this year. (REINZ)
“Agents say banks are slow to move, impacting first home buyers’ ability to secure finance quickly.”
The current Days to Sell of 33 days is less than the 10-year average for July which is 39 days. There were 18 weeks of inventory in July 2022 which is 10 weeks more than the same time last year.
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