DRURY May 2022
Property market slows, prices remain stable Sales activity in the residential property market continued to slow in April. Although there were fewer listings sold, property prices remained stable, according to the figures from the Real Estate Institute of New Zealand (REINZ). Compared to March, there was nearly a 30 percent decrease in sales across the country in April. However, March is typically a strong month for real estate sales. While the change is significant, the seasonally adjusted figures for New Zealand show a decrease of 0.9 percent moving from March to April – only a marginally weaker result than usual for this month. However, it is clear there has been a change in the property market, and the demand for property has weakened, REINZ chief executive Jen Baird said. “We’re seeing a slowdown in activity, there is more stock staying on the market for longer, and while annual price growth is more moderate, the month-on-month trend shows a fall in median prices.” “April residential property sales decreased annually by 35.2 percent across New Zealand, a story reflected across all regions. Looking at the underlying reasons for the continued decrease in sales count, the seasonally adjusted figures provide some insight. Last year sales volumes were underperforming due to supply challenges, and post-October 2021 when we began to see an influx of stock, it became a market underperforming due to demand challenges.”
Baird also noted REINZ received reports of fewer people attending open homes and auction rooms, as well as a decrease in buyer enquiries. However, the number of public holidays in April may have influenced this trend. “Those who are backed by equity and secure in a job market with a low unemployment rate, will continue to see opportunity in the market as more stock increases choice, and prices ease. Owneroccupiers are the most present and active in the market, so while we see a softening in the mid to low price range, interest is solid in the mid to high bracket,” she said.
Kiwi Bank Senior Economist Jeremy Couchman said the data shows the housing market is paying for last year’s excesses. “It’s also clear that the NZ housing market is in for a rough ride over the year ahead. The market is adjusting to the new reality of rising housing supply, investor-related tax changes, and far tighter credit conditions. Mortgage rates rose sharply over April as financial markets anticipate ongoing and aggressive OCR hikes to be delivered by the RBNZ this year and next,” Couchman said.
As always, we trust you enjoy this month's publication.
Kind Regards,
Brent Worthington Principal LJ Hooker Drury & Rent Exchange Property Management T 029 294 7500
