New Zealand Sotheby’s International Realty Residential Market Report
March 2023
Market Overview - March 2023
market and first home categories with these markets increasing from 23.5% to 30.4% and 10.8% to 15.7% respectively. This does reflect some life in the market potentially as the first home buyers from 4 to 7 years ago have buyers in the market keen to purchase their first home today. This allows them to move on to the next home on the housing ladder driving stimulation in the higher price points in time.
The Reserve Bank of New Zealand’s decision to increase the Official Cash Rate (OCR) by 0.5% last month has indicated that they believed the economy needs further slowing with unsustainable inflation levels and a real estate market that took some stopping from its peak. The ongoing and consistent increases in the OCR have had the desired impact on the real estate market, which had been buoyed by the COVID stimulus period and the cheap money offered in 2020/2021.
AUTHOR HAYDEN DUNCAN - Managing Partner
Real estate has always been a critical component of the New Zealand economy, and as such, many Kiwis look to the sector for an indication of how the economy is faring. The latest figures released by the Real Estate Institute of New Zealand (REINZ) for March 2023 paint a picture of a market that is still in the process of correction off the back of an over-stimulated economy that is now being reined in.
One of the most significant takeaways from the latest data is that the national median house price has continued to drop year-on-year in March, with a further 12.9% fall. Locally, in the Bay of Plenty, the median house price has dropped by 11.8% to $820,000. Additionally, sales volumes in the region dropped by 9.8% and the days to sell a home in the Bay of Plenty region have increased significantly to 61 days, compared to the 10-year average of 41 days. This suggests that further price declines are on the horizon to meet the buyer expectations. Anecdotally agents are reporting good enquiry numbers from potential buyers however buyers are seeming very price sensitive which is leaving some optimistically priced homes on the market longer than necessary.
A big discussion point in the latest data is the price distribution changes. The $1,000,000 + market made up 40.2% of all the New Zealand real estate sales in March 2022 and only 27.8% in March of 2023. This is impacted by some properties in the million dollar plus range in 2022 no longer achieving that value now and falling into the sub million dollar range, also an indication that more owners of properties in this category are happy to wait out the market and potentially have other options than to sell now. The big rise in price distribution range was the middle
The good news this week comes off the back of the latest inflation numbers being lower than expected. Although still high, the inflation numbers are welcome news, as they now sit below 7% and below Australia’s inflation rate. The change has surprised many economists who were expecting to see the inflation number closer to 7.2%. This suggests that New Zealanders are responding to the changes, and supply and demand factors are starting to become more balanced albeit there is a long way to go before the target inflation range is achieved.
Looking ahead, the question on everyone’s mind is “What comes next? The OCR increases were necessary to cool the market, but with inflation starting to show a decline, it is possible that we have seen the end of them. However, what is clear is that New Zealand is facing strong economic headwinds, and real estate values tend to be impacted by those headwinds. There are always winners in these situations however, and some are surprised to find that the difference between their current home and their new one may be less, given the decline in values affecting all categories and price points in the market.
It is interesting times which certainly require an experienced agent with access to markets far and wide to ensure you have peace of mind that the best outcome is achieved. The New Zealand Sotheby’s International Realty team in the Bay of Plenty have undertaken some significant sales in the last few months with very satisfied clients. If you need help or advice on real estate in the area, our team are here and able to assist.
- Hayden Duncan
About the author: Hayden Duncan is a real estate veteran with over 20 years experience. His career has included being the CEO of NZs largest real estate group, Head auctioneer for NZs largest full service real estate company and after setting up a real estate company in Canada he is now based in Tauranga and works within the market here assisting agents to deliver quality results throughout the Bay of Plenty and Coromandel as Managing Partner of BOP NZSIR.
REINZ Market Summary | March 2023
REINZ Market Summary | March 2023
Western Bay of Plenty District
Median Sale Price change since last year -11.8% Median Sale Price Overall Sales Bay Of Plenty $820,000 Total Number of Sales Bay Of Plenty 385 Median Days to Sell Bay Of Plenty 61 *All Statistics from Real Estate Institute of New Zealand Tauranga City Location Median Sale Price % Sale Price Diff from 1yr Prior Number of Sales Median Days to Sell Tauranga City $875,000 -15.3% 252 56 Tauranga Suburbs Bellevue $650,000 -15% 10 106 Bethlehem $1,498,000 +7% 9 45 Brookfield $870,000 -4.5% 5 98 Gate Pa $642,500 -17.6% 7 43 Greerton $725,000 -8.3% 20 49 Judea $680,000 -20.2% 1 112 Matua $1,465,000 -8.3% 12 44 Maungatapu $800,000 -21.6% 3 47 Mount Maunganui $970,000 -8.1% 37 51 Ohauiti $980,000 +20.2% 5 57 Otumoetai $885,000 -41.1% 12 56 Papamoa Beach $980,000 -21.6% 67 51 Pyes Pa $975,000 -16.6% 30 49 Tauranga Central $1,005,500 +4.4% 5 36 Tauranga South $650,000 -15.3% 6 62 Welcome Bay $820,000 -10.9% 14 71
Location Median Sale Price % Sale Price Diff from 1yr Prior Number of Sales Median Days to Sell Western Bay of Plenty $807,000 -26.6% 47 83 Katikati $747,000 +3.8% 8 58 Omokoroa $870,000 -36.3% 11 59
REINZ Market Summary MARCH 2023
Each office is independently owned and operated. NZSIR BOP Limited (licensed under the REAA 2008) Median Sale Price change since last year -11.8% Median Sale Price Overall Sales Bay Of Plenty $820,000 Total Number of Sales Bay Of Plenty 385 Median Days to Sell Bay Of Plenty 61 *All Statistics from Real Estate Institute of New Zealand Tauranga City Location Median Sale Price % Sale Price Diff from 1yr Prior Number of Sales Median Days to Sell Tauranga City $875,000 -15.3% 252 56 Tauranga Suburbs Bellevue $650,000 -15% 10 106 Bethlehem $1,498,000 +7% 9 45 Brookfield $870,000 -4.5% 5 98 Gate Pa $642,500 -17.6% 7 43 Greerton $725,000 -8.3% 20 49 Judea $680,000 -20.2% 1 112 Matua $1,465,000 -8.3% 12 44 Maungatapu $800,000 -21.6% 3 47 Mount Maunganui $970,000 -8.1% 37 51 Ohauiti $980,000 +20.2% 5 57 Otumoetai $885,000 -41.1% 12 56 Papamoa Beach $980,000 -21.6% 67 51 Pyes Pa $975,000 -16.6% 30 49 Tauranga Central $1,005,500 +4.4% 5 36 Tauranga South $650,000 -15.3% 6 62 Welcome Bay $820,000 -10.9% 14 71
Location Median Sale Price % Sale Price Diff from 1yr Prior Number of Sales Median Days to Sell Western Bay of Plenty $807,000 -26.6% 47 83 Katikati $747,000 +3.8% 8 58 Omokoroa $870,000 -36.3% 11 59
Western Bay of Plenty District
Property Highlights NEW TO THE MARKET
SIGNIFICANT SALES
Maranui Street,
for undisclosed price Real estate sold by real experts Each office is independently owned and operated. NZSIR BOP Limited (licensed under the REAA 2008) MREINZ. 07 578 0003 | nzsothebysrealty.com
NZSIR
20 Montiicola Drive, Papamoa Beach Brought to the market by James Mooney and Richard Laery
Unit 3/5C
Mount Maunganui Sold
2 Benmore Crescent, Pyes Pa Sold for $1,065,000 NZD
34 Pah St, Matua
Brought to the market by Chris Pringle
164B Oceanbeach Rd, Mount Maunganui Brought to the market by Luke Nobilo