New Zealand’s continues to see a decline in the average housing prices

According to Quotable Value (QV), the average value of homes in Jan’23 was $934,761, indicating a decrease of $10,006 (-1.6%) since Dec’22 and $129,004 (-12.1%) since January last year. The Wellington Region saw the biggest decline in dollar terms over the year, with average values dropping by $222,749, followed by the Auckland Region with a drop of $220,355, and Tauranga with a decline of $143,668. In percentage terms, the Wellington Region had the biggest decreases in average value over the 12 months to January, with -20.4%, followed by Palmerston North with -17.3%, and Hastings with -14.7%.

The Queenstown-Lakes district was the only major urban area that reported an annual increase in average value, with a rise of $89,788 (+5.6%) compared to January last year. However, even their values have started to fall, declining by 0.7% in the three months leading to January. David Nagel, QV Chief Operating Officer, stated that the property market may not have hit rock bottom yet, which could make prospective buyers cautious. Moreover, some people are finding it difficult to obtain finance or are unwilling to make a long-term commitment due to the current high level of economic uncertainty.

The Real Estate Institute of New Zealand (REINZ) has reported a slower decline in house prices in January 2023 compared to previous months. Despite the traditionally slower month, the report shows that there were 943 sales in Auckland, the lowest number since records began, and 2,759 sales across the rest of the country. High interest rates, the ability to secure finance, a looming recession, and election year have contributed to slower decision-making from buyers. As a result, properties are spending longer on the market, with a median of 53 days to sell in January 2023, 16 days longer than in January 2022.

Nationally, the median sale price has decreased by 13.3% to $762,500, with Auckland dropping below $1 million for the first time in two years to $940,000. The REINZ House Price Index (HPI) also showed an annual decrease of 13.9% in the value of residential property nationwide. The report highlights that while regional median house prices continue to decrease across the board, three regions saw marginal increases: Gisborne (+3.8%), Taranaki (+0.8%), and the West Coast (+5.3%). New residential listings decreased by 16.0% year-on-year, with 6,646 listings in January 2023, while inventory has increased by 39.4% year-on-year, providing plenty of choice for buyers.

Other regions that experienced notable drops include Northland and Bay of Plenty, with median sale prices down by 16.6% and 18.8% respectively.

The Herald has reported that nearly half of New Zealand’s mortgage debt is due to be refinanced between October 2022 and September 2023, and some borrowers may experience significant increases in their repayments.