DRURY June 2022
Buyer activity slows, median house price growth recedes Economic conditions are putting noticeable pressure on the New Zealand property market, with sales taking longer to complete, fewer active buyers and reduced activity pushing up prices, according to the latest Real Estate Institute of New Zealand figures. The annual median price increase for residential property across New Zealand has slowed, up 2.4 percent from May 2021 when the median price was $820,000. In May 2022, the median price was $840,000, which was a month-on-month decrease of four percent from April, when the median price was $875,000. Auckland was the only region to show a reduction in annual median prices, down 2.2 percent. This is the first time the annual median price has dropped in Auckland since October 2019. The Super City also saw reductions month-on-month, with a median price drop of 3.9 percent. Hawke’s Bay is the other notable region, which has seen no growth in its annual median price which is the same as May 2021 at $730,000. Apart from the West Coast, which achieved a new median price record for May, median prices in the regions have come off their peak, REINZ chief executive Jen Baird said.
“Over the course of 2021, house prices soared, largely due to supply not being able to meet demand, supported by historically low interest rates and access to capital,” she said.
“With further increases to interest rates to counter inflation expected and global economic uncertainty and supply chain disruption caused by the conflict in Ukraine, we may see market activity settle this winter at its new, slightly slower, pace.” Kiwibank chief economist Jarrod Kerr said while economic conditions have slowed the market, policy changes have played a part in turning many away from housing.
“Policy changes such as new tax rules for investors, CCCFA changes to bank due diligence requirements, and tighter deposit requirements,” he said. “We continue to forecast that house prices will fall 10-11 percent by the end of this year before slowly getting up off the canvas from late 2023.” As always, we trust you enjoy this month's publication.
Kind Regards,
Brent Worthington Principal LJ Hooker Drury & Rent Exchange Property Management T 09 294 7500 M 0292 965 362
