Tag Archives: New Zealand Housing Market Updates

Auckland Real Estate Market, Christchurch Real Estate, new zealand real estate

New Zealand Housing Market Slumps in June Amidst Rising Listings and Waning Demand

person By Vikram Jethwani alarm 29th Jul, 2024
New Zealand Housing Market Slumps

The New Zealand housing market slumps experiencing a significant downturn in June, with the nationwide median sale price dropping by 1.3% year-on-year and house sales plummeting by 25.6% over the same period. Data from the Real Estate Institute of New Zealand reveals that this marks the worst sales count for a June month since 2008, with Auckland experiencing its worst June on record.

This slump in the market is attributed to a surge in listings at the start of the year, effectively shifting the market from a seller’s market to a buyer’s market. This is in stark contrast to the situation in Australia, where house prices continue to rise despite increased stock levels, driven by factors such as strong population growth, a tight rental market, and a chronic shortage of new housing due to a lack of new construction.

Experts suggest that confidence in the Australian economy and continued strong net migration have contributed to the divergence in the housing markets of the two countries. Additionally, active investors fueled by tax breaks are playing a significant role in driving up house prices in Australia.

The decline in homeownership rates in New Zealand is another concerning trend. A recent Deloitte report commissioned by Westpac indicates that fewer than 60% of New Zealanders currently own their homes, a number projected to decline further based on current trends. The report highlights shared home ownership options as a potential solution, with Westpac announcing a target of lending $1 billion to affordable housing solutions over the next three years.

While some New Zealanders are opting to relocate to Australia, they may face similar challenges in a tough housing market there as well. The rising cost of living and housing affordability issues are increasingly affecting younger generations in both countries.

Despite the current slump in New Zealand’s housing market, experts are not predicting a similar downturn in Australia. The prevailing sentiment suggests that Australian house prices are unlikely to experience a significant decline, even with interest rates potentially peaking.

 

Christchurch Real Estate, new zealand real estate

New Zealand Housing Market Updates: Changing Demand and Supply Dynamics

person By Hadar alarm 31st Oct, 2022
New Zealand Housing Market Updates

Statistics NZ provides the estimate of decrease in natural demand for housing in New Zealand. The increase of 21,200 was witnessed in June 2021. However, this figure has dropped to 12,700 in June 2022. Moreover, this is much below than the average demand 94,800 a year, witnessed from 2018 to 2020.

Generally, it takes two years for dwellings to take the shape from the moment of their consent. It is an indicator that the supply takes more time to adjust to the demand. However, the unpredicted pandemic restrictions suddenly halted the immigration, which led the supply to remain stable but caused the demand to decrease substantially, hitting the New Zealand housing market hard.

Besides the pandemic and its implications on immigration, the natural population growth also slowed down, causing the dwellings to remain unutilized. Interest.co.nz estimated that the housing demand rose to approximately 10,000 in the year 2020. The current supply would have eliminated the housing shortage that was seen due to the increasing number of immigrants and growing population.

New Zealand housing market updates show that the current situation of exceeded housing supply over the demand is putting pressure on residential property investors in a substantial way. The affects will be apparent in form of decreasing property prices, lowering rental values and eventually decreased capital values.

New Zealand housing market updates

The major housing surplus in 2022 can be seen in Auckland, Canterbury, Otago and Wellington. The data for Auckland indicates an approximate population loss of 19000 and the increase in supply of dwellings by 35,386. In Wellington, the housing supply was 2655 against the demand of 664, causing the surplus to be 1991. Otago witnesses the decrease in requirement. When the supply is 2179, the requirement as well decreases with decrease in population by 350 and the demand of new houses by 145, causing the surplus to be 2324.

The data provided for the year 2022 shows, the surplus in Auckland by 17,860 as the estimated new dwellings are 14,780 while the requirement of new housing decreased by 3080. Otago sees the surplus in housing by 2248. The requirement, as well, is increased but marginally by 580, still keeping the higher number of dwellings unutilized. Similarly, there was marginal increase by 1928 in demand in Canterbury against the supply of 5771, causing the surplus of 3843.