The comments come after REINZ's latest monthly property report
Tim Kearins, owner of Century 21 New Zealand, said it was promising that “many regions remain up on last year” and “that first-home buyers are returning to the market, but more should be enabled to get on the property ladder.”
Kearins’ comments come following the release of REINZ’s Monthly Property Report for July which found that median house prices across New Zealand dropped 1.8% annually to $810,000, from $825,000 in July 2021. Month-on-month saw a 4.7% slip compared to June.
“In more affordable regions, we have continued to see significant growth compared to larger markets such as Auckland and Wellington,” REINZ said. “Agents across the country report they are starting to see demand return from first-home buyers in the market and some are seeing renewed interest from investors.”
“When you exclude Auckland from these latest numbers, the median price for the rest of New Zealand has increased 4.5%, with the likes of Waikato up 8.0% on this time last year,” Kearins said. “Century 21’s offices in the regions continue to report some solid results as the more affordable parts of the country are now getting picked over.”
Across New Zealand, the number of residential property sales in July saw an annual drop of 36.7%, from 7,391 in July 2021 to 4,678. The total number of properties available for sale nationally, meanwhile, surged by 107.8%, from 12,684 in July 2021 to 26,358.
“Overall, sales activity has continued to slow with people showing greater caution,” Kearins said. “Subsequently, softening demand is leading to an increased volume of stock on the market. As REINZ observe, it’s not a result of distressed vendors. Rather, buyers are simply stepping back with lending restrictions not helping.”
Kearins recently called on the government to formally review the impact of the new regulations on mortgage applications and make further changes if required. He said that while it was encouraging that the government had made tweaks, the hurdles remain too high for many Kiwis seeking a mortgage.
The number of new mortgage approvals has fallen significantly since the Credit Contracts and Consumer Finance Act (CCCFA) regulations and a Responsible Lending Code came into force on Dec. 1.
“Many very backable young Kiwis, with solid incomes, are missing out on property purchases just when a softening market is creating great opportunities for them,” Kearins said. “Lending regulations are critical, but they must also be workable. I’m not convinced the government has quite got the balance right yet.”