Buyer interest increases and stock levels are up - October 2022

While October sees an increase in enquiry and open home attendance in some regions, rising interest rates have caused hesitancy amongst buyers across Aotearoa New Zealand. The national median price showed improvement on September. Still, prices continue to ease, sales activity remains down and properties are taking longer to sell than in October 2021

Across New Zealand, median prices for residential property (excluding sections) decreased 7.5% annually, from $892,000 in October 2021 to $825,000 in October 2022. Month-on-month, this represents a 1.9% increase from $810,000 in September.

Jen Baird, Chief Executive at REINZ, comments: “In October 2021, increased optimism over the easing of lockdown restrictions in Auckland combined with a delay to the introduction of changes to the Credit Contracts and Consumer Finance Act (CCCFA) from October to December impacted market activity. Able to transact and keen to move before tougher lending restrictions were implemented, people come to market hard and fast, contributing to a sense of urgency that is reflected in REINZ property data for October last year and is apparent in our annual comparisons.”

“In October 2022, the national median price decreased 7.5% compared to the same period last year. Four regions bucked the trend — with Marlborough reaching a record median price. It is worth noting while the region’s location and size mean it can be less affected by some market headwinds, the median price is more subject to variability than bigger regions due to the smaller volume of transactions. For example, in September, the region recorded its lowest median price since August 2021; this month, it hit a record high. Time will tell if this high is the new normal or an anomaly due to a relatively small number of sales.

“This year, several compounding factors have created uncertainty and hesitancy in the market where there was confidence and urgency last year — rising interest rates and the cost of living, tax legislation and property regulation, tightened lending criteria, and global events with macro-economic impacts.

“We see downward pressure on prices, and the pace of the market has come down. However, over the last couple of months, salespeople have observed an increase in enquiries and a noticeable increase in the number of first home buyers back in the market,” Baird observes.

The regions with the greatest annual percentage decrease were:

• Tasman: Decreased 45.0% annually from 80 to 44

• Auckland: Decreased 42.2% annually from 2,688 to 1,554

• Southland: Decreased 40.9% annually from 149 to 88

• Northland: Decreased 39.1% annually from 184 to 112

Regional Analysis - Northland

“The median price in Northland increased 2.9% annually to $720,000 in October 2022. Most buyers are taking a cautious approach to the market, and investors have stepped back almost completely. However, first home buyers are back out there looking. Vendors are ready to negotiate, and those vendors new to the market are now aware of the change in prices and are listing their properties with realistic value expectations.

“Northland salespeople say that while the market is steady, it is not yet a traditional spring market in terms of sales activity. Sales counts declined 39.1% compared to this time last year. Further increases to interest rates and the rising cost of living risk slowing the market further in the coming months.” (REINZ)

The current Days to Sell of 44 days is less than the 10-year average for October which is 47 days. There were 33 weeks of inventory in October 2022 which is 17 weeks more than the same time last year.

Regional Analysis - Auckland

“Auckland’s median price decreased 12.7% annually to $1,090,000 this October. Owner occupiers continue to dominate the Auckland market as affordability and lending criteria remain barriers for first home buyers. Some younger potential first home buyers are now heading overseas instead.

“Salespeople across Auckland report vendors’ expectations are more realistic and that open homes are attracting more people — particularly in the coastal and lifestyle market. Properties are spending less time on the market — the median days to sell decreased two days from 45 days in October 2021 to 43 in October 2022 — bearing in mind Auckland was in an Alert Level 3 lockdown in October last year.” (REINZ)

The current Days to Sell of 43 days is more than the 10-year average for October which is 35 days. There were 28 weeks of inventory in October 2022 which is 8 weeks more than the same time last year.

Regional Analysis - Waikato

“Waikato saw its median price decrease by 0.2% annually to $800,000 this October. Owner occupiers were most active across the region — whereas first home buyers and investors are still a minority due to affordability, increases in interest rates and ability to secure finance.

“Salespeople say the Thames market is slow but steady — there has been an increase in enquiry and viewings, but buyers lack the urgency to make purchase decisions. In Taupo, the market is operating at a slower pace, with more conditional contracts and properties spending longer on the market. In October, the median days to sell in Taupo increased by 37 days compared to this time last year.

“In Hamilton, homeowners are having a difficult time with increasing costs driven by rising interest rates. Buyers have little urgency — and those who recognise this market is an ideal time to buy are held back by lending criteria restrictions.” (REINZ)

The current Days to Sell of 51 days is much more than the 10-year average for October which is 35 days. There were 31 weeks of inventory in October 2022 which is 22 weeks more than the same time last year.

Regional Analysis - Bay of Plenty

“The median price in the Bay of Plenty decreased by 4.4% annually to $860,000 in October this year. In Rotorua and Tauranga, first home buyers and owner occupiers were active in the market. Rotorua salespeople also reported adequate interest from developers beginning to filter through.

“In Tauranga, salespeople say there are opportunities for first home buyers not available previously, and when finance is confirmed, they are acting on it. There is also an increase in higher-end stock coming to the market but, again, lower buyer demand.

“Across the Bay of Plenty, newly listed properties with quality marketing campaigns attracted higher than average open home attendance this month.” (REINZ)

The current Days to Sell of 53 days is much more than the 10-year average for October which is 41 days. There were 27 weeks of inventory in October 2022 which is 18 weeks more than the same time last year

Regional Analysis - Gisborne

“Gisborne’s median price decreased 4.0% compared to this time last year to $600,000.

“October saw low attendance at open homes, largely due to rising interest rates and lending criteria remaining a challenge for many buyers. Owner occupiers were the most active buyer pool, and vendors started to meet the market in terms of their price expectations.” (REINZ)

The current Days to Sell of 42 days is more than the 10-year average for October which is 37 days. There are 12 weeks of inventory in October 2022 which is 2 weeks more than last year.

Regional Analysis - Hawke's Bay

“In October, the median price in Hawke’s Bay decreased 11.0% annually to $730,000. First home buyers, owner occupiers and out-of-town buyers were the most active buyer pools — investors have shied away almost completely.

“Hawke’s Bay salespeople say that vendors are either more realistic with their price expectations or have withdrawn their property from the market altogether. Attendance at open homes was inconsistent throughout October, but wellpresented new listings in popular areas attracted good attention.” (REINZ)

The current Days to Sell of 50 days is much more than the 10-year average for October which is 36 days. There were 20 weeks of inventory in October 2022 which is 11 weeks more than the same time last year.

Regional Analysis - Taranaki

“Taranaki’s median price decreased 4.8% annually in October to $600,000. Whilst owner occupiers remain the most dominant buyer pool, there was little activity from investors due to difficulties obtaining finance, increasing interest rates, fear of overpaying, uncertainty around property management regulation, and a general lack of confidence in the economy.

“Taranaki agents report a good level of buyer enquiry over October, but buyers still have very little urgency. There is a feeling of uncertainty amongst vendors and buyers as they try to anticipate the movements of the market over the summer months. Taranaki often sees out-of-town buyers visit the region in the summer, and agents are hopeful this will be the case this year, resulting in more market activity.” (REINZ)

The current Days to Sell of 37 days is more than the 10-year average for October which is 32 days. There were 21 weeks of inventory in October 2022 which is 14 weeks more than the same time last year.

Regional Analysis - Manawatu/Whanganui

“October saw the median price in Manawatu/Whanganui decrease by 10.6% year-on-year to $550,000. There was an increase of first home buyers in the market — however, they remain concerned about further rises in interest rates and their ability to secure finance. Investors are scarce due to tax legislation and loan-to-value ratios.

“Some vendors who are unable to sell are withdrawing their property from the market, and properties are spending an additional 25 days on the market compared to this time last year.” (REINZ)

The current Days to Sell of 54 days is more than the 10-year average for October which is 33 days. There were 26 weeks of inventory in October 2022 which is 16 weeks more than the same time last year.

Regional Analysis - Wellington

“The median price in the capital decreased 17.2% annually to $828,000. First home buyers have slowly but surely re-entered the Wellington market. Vendors understand that when listing a property in this market, a focus on presentation and marketing, and an adjustment to price expectation, is necessary — for vendors that need to sell due to a change in employment or life circumstances, this is vital.

“Attendance at open homes was mediocre as people remain uncertain about their purchase decisions. Wellingtonian agents expect this to continue over summer.” (REINZ)

The current Days to Sell of 49 days is much more than the 10-year average for October of 32 days. There were 16 weeks of inventory in October 2022 which is 9 weeks more than the same time last year.

Regional Analysis - Nelson/Marlborough

"Due to lifestyle and central location, local salespeople say Nelson, Marlborough, and Tasman have traditionally enjoyed a level of insulation from market headwinds — allowing them to maintain a relatively stable housing market compared to the larger cities. This isn’t to say that they aren’t impacted by changing conditions — just to a lesser degree.

Like many areas in New Zealand this October, Tasman’s median price decreased — down 8.9% to $820,000 year-on-year. However, Nelson and Marlborough bucked the national trend. Nelson’s median price was up by 3.3% annually to $775,000, and Marlborough’s was up 20.7% to $781,000, reaching a new record high." (REINZ)

The current Days to Sell of 48 days is much more than the 10-year average for October which is 32 days. There were 23 weeks of inventory in October 2022 which is 13 weeks more than the same time last year.

Regional Analysis - West Coast

“The West Coast saw an annual 7.2% increase in its median price this October, to $321,700. Unlike other regions across Aotearoa, anecdotally, October brought a typical spring month in real estate to the West Coast, including continued interest from prospective purchasers. Properties sold faster than last October — the median days to sell was down by 13 days.

“West Coast salespeople say the rising cost of living has seen some out-of-town buyers from the larger cities consider the West Coast as a prime place to call home.” (REINZ)

The current Days to Sell of 23 days is much less than the 10-year average for October which is 86 days. There were 34 weeks of inventory in October 2022 which is 3 weeks more than the same time last year.

Regional Analysis - Canterbury

“Canterbury saw a slight decrease in its median price this October — down 0.9% to $659,000. First home buyers are actively looking — particularly in central Christchurch. Salespeople say that despite a rise in interest rates, Canterbury’s affordability makes it an attractive option for this buyer pool.

“Attendance at open homes picked up with the warmer weather making a positive difference. Whilst the usual spring lift in market activity was delayed at first, it is now in full swing. Buyers are beginning to feel more confident — particularly in the upper end of the market. Auctions have attracted multiple bidders and satisfactory bidding, with lifestyle properties attracting the best results in the auction room.” (REINZ)

The current Days to Sell of 36 days is more than the 10-year average for October which is 31 days. There were 19 weeks of inventory in October 2022 which is 10 weeks more than the same time last year.

Regional Analysis - Otago

Dunedin: “Dunedin’s median price decreased 7.9% annually to $621,500. Buyers are slow to act and have a fear of overpaying. Vendors have realised the shift in market sentiment and are adjusting their price expectations accordingly. 

“The ability to secure finance continues to affect first home buyers negatively and is slowing the pace of sales. As a result, properties are spending longer on the market — the median days to sell increased by 19 days compared to last October.” (REINZ)

Queenstown: “In October, the median price in the QueenstownLakes District decreased 9.8% annually to $1,240,000. Salespeople report an increase in interest from prospective buyers outside of the region — particularly from the bigger cities. There was also some enquiry from Australia, with holidaymakers viewing properties when in the region — with the intention of buying.

“The most significant impact on the Queenstown-Lakes District market is rising interest rates which is causing hesitancy amongst buyers and concern amongst vendors that the value of their property will decline.” (REINZ)

The current Days to Sell of 48 days is much more than the 10-year average for October which is 33 days. There were 19 weeks of inventory in October 2022 which is 10 weeks more than the same time last year.

Regional Analysis - Southland

“The median price in Southland decreased 2.8% annually to $430,000. However, Invercargill City reached a new record median of $485,000. Owner occupiers remain the most active buyer pool in the region — backed by equity, securing finance is less of a barrier to this group. Rising interest rates and tax legislation are negatively impacting the Southland market, dampening sales activity. Sales counts decreased by40.9% annually.”

The current Days to Sell of 32 days is more than the 10-year average for October which is 29 days. There were 17 weeks of inventory in October 2022 which is 8 weeks more than the same time last year.