There are plenty of possibilities for buyers and sellers keen to act before winter, he says
“We’ve re-entered a more balanced and calmer market,” said Tim Kearins, Owner of Century 21 New Zealand, but noted that “it’s not a buyers’ market yet” despite some headlines, including house prices remaining strong, and overall, still up on the same time last year.
Read more: How frustrated vendors can secure a sale
Kearins’ comments follow the release of REINZ’s Monthly Property Report for April, a month which saw median house prices across New Zealand rise 8.8% annually. The national median house price is at $875,000, up from $804,362 in April 2021.
“We’re now in the phase of the property cycle where demand has weakened, sale counts are down but prices remain high,” REINZ said.
“It’s easy to compare now to some unbelievable prices achieved during 2020 and 2021,” Kearins said. “Regardless, most properties remain well ahead of where they were in 2019. In fact, plenty are still selling for 40% more than what the owners paid three or four years ago. Without doubt the froth is coming off, but most vendors are still enjoying substantial gains.”
Kearins said the property market has taken a big hit since December, with the Credit Contract & Consumer Finance Act (CCCFA) making lending much tougher. However, he expected the government’s proposed tweaks to the lending law, set to be enacted next month, to be positive.
Interest rates have continued to rise, however. Just last month, the OCR rose by 50 basis points to 1.5% – marking the fourth consecutive hike since October last year and the biggest jump in over 20 years. Now all eyes will be on the Reserve Bank’s next OCR decision on May 25.
“Interest rates have been rising, but they’re still miles off where they have been in previous decades,” Kearins said. “Historically, they’ve tended to be around six or seven per cent on average for Kiwi borrowers. Like house prices, we tend to compare today’s interest rates to the extraordinary period of 2020 and 2021, but they’re still below the historical average.”
Across New Zealand, the number of residential property sales in April decreased annually by 35.2% from 7,497 in April 2021 to 4,860. The total number of properties available for sale nationally, meanwhile, increased 70.8%, from 15,838 in April 2021 to 27,050.
“Listings are up, and sales are down,” Kearins said. “April saw a stand-off with many vendors refusing to budge while buyers kept their hands in their pockets. However, we’re starting to see more Kiwis meet the market, with some very satisfactory outcomes being achieved for both parties. The 2020 and 2021 froth has subsided, properties in demand are still making good money, and interest rates remain below the historical average. There are plenty of good opportunities out there for buyers and sellers keen to act before winter.”