New data reveals that towards the end of 2022, seven out of New Zealand’s regions have become buyers’ markets due to falling home prices.
According to Realestate.co.nz, the property market has seen a significant change in 2022, after an “interesting” year in which the national average asking price trended lower in reaction to growing inflation, interest rate rises, and changed lending restrictions.
“Many outside forces have been at work this year. Not only has the New Zealand economy been booming, but the rising prices we saw during the height of pandemic restrictions have also begun to level down, “According to Vanessa Williams, a representative from real estate.co.nz.
Hawke’s Bay, Taranaki, and Otago joined the rest of the country in becoming buyers’ markets last month. Meanwhile, Auckland, Waikato, Nelson and Bays, and the rest of the country maintained their long runs as buyers’ markets.
Wellington’s real estate market swung in favor of buyers for eight consecutive months, from March to October of 2022, before shifting again to a sellers’ market in December.
Furthermore, real estate.co.nz, said that Manawatu/Whanganui was on the cusp of becoming a buyers’ market by 2022.
Williams claims that rising interest rates are to blame for the emergence of buyer’s markets.
“The average fixed mortgage rate for a two-year loan in December 2021 was 4.73 percent. This increased to 6.75 percent in November of 2022. The cost of borrowing money has grown over the last year, making consumer credit more limited, “as she put it.
Fewer buyers in the market and stock increases around the motu create a perfect storm where supply exceeds demand, and buyers’ needs form,” said Williams.
But, she said, sellers shouldn’t automatically assume the worst in a buyer’s market: “There is greater room for negotiation and research in a buyers’ market. That won’t always translate to cheaper rates, however.”
The inventory of homes is growing worldwide.
According to real estate.co.nz, the number of available homes in every region increased from the previous year’s December. The number of available homes in four areas increased by more than 100%. Coromandel grew by 175.3%, Nelson & the Bays grew by 147.2%, Taranaki grew by 118.6%, and the middle of North Island grew by 118.2%. (up 110.3 percent).
Overall, national stockpiles increased by 55.3% over the previous year.
Williams said there is more variety for individuals seeking real estate in popular summer vacation areas than a year ago.
“In compact areas like the Coromandel, this is crucial. After the end of 2021’s December, just 157 residential properties remained on the market. As of the end of 2022’s December, there were 432 houses for sale, “According to Williams.
Buyers will have a much easier time selecting a home that meets their needs.
Southland has an all-time high median asking price.
For the first time since records started 15 years ago, the average listing price in Southland has surpassed $547,269.
Southland’s price increases in 2022 have been above the national average and now stand at 10.6 percent more than in December 2021.
According to real estate.co.nz, prices are so high because demand is higher than supply. There was a 39.3 percent drop in the number of new listings in the area compared to the same time the previous year.
As in other areas, population growth has decreased in Southland over the last year. Thus, Williams concludes that migration is not to blame for the increase in home prices.
However, with a median asking price of $547,269, just more than half the national median, Kiwis may have recognized the area as a desirable spot to purchase the property.
After falling under $900,000 in November 2022, the national average listing price climbed to $920,422 in December.
Reduced number of new postings across the board
According to Realestate.co.nz, the number of new listings was consistently low across all areas in February compared to February 2021. Only Taranaki and the Coromandel experienced an increase in new listings year over year, while Gisborne had no change.
“More than 20% of new listings nationwide and nine areas were lost in December 2022. Compared to December 2021, fewer homeowners will list their properties for sale in December 2022. “It was Williams who made the remark.
The upcoming election, pricing uncertainty, or the increased cost of financing are all contributing factors.
Williams noted that the lifting of lockdown limitations in December 2021 in Auckland and specific areas of Northland and Waikato did not affect the decline in new listings in December 2022.
“Normally, during lockdown periods, we noticed a flurry of fresh postings, but in December 2021, that wasn’t the case everywhere in the country. On the other hand, the number of new listings was about the same as it had been in December 2020.”, she said.
