Home prices continue to decline from last year’s peak, but the market is expected to recover in the spring.
The Housing Market Report from the Real Estate Institute (REINZ) shows that the house price index, which measures changes in property values, fell 5.8% for the year ending August , compared to a drop of 2.9% in July.
The seasonally adjusted national median price for August fell 5.9% from a year ago and 2.1% from July to $800,000.
House prices were still 37% higher than in 2019 and nearly 19% above their 2020 level.
The Reserve Bank’s pandemic response, which included lower interest rates, quantitative easing and the removal of loan-to-value ratios, contributed to a rapid acceleration in house prices before they hit. peak in November 2021.
REINZ chief executive Jen Baird said prices fell in four of the 16 regions monitored. Two of them were the main markets of Wellington and Auckland, which affected the movement of the national median price.
Wellington and Auckland saw the strongest house price appreciation at the start of the pandemic and were now experiencing the most dramatic falls, with prices down 19.3% and 16.3% from their respective highs .
The median residential price for New Zealand excluding Auckland remained unchanged from a year ago at $700,000.
Despite prices falling in pockets nationwide and supply picking up as well, selling activity remained subdued, Baird said.
“These positives for buyers are offset by higher mortgage rates as rising interest rates and inflation concerns continue to put a damper on many potential buyers.”
However, it appeared that some buyers in the market were taking advantage of the lower prices on offer.
“Some real estate agents are reporting an increase in footfall for open homes. And while owner occupiers remain a dominant force in the market, first-time home buyers are starting to reappear.”
August tended to be a quieter month for the housing market and she expected to see the usual spring activity pick up, she said.
Domestic commercial activity is down 18.3% from a year ago, with 4,891 transactions.
Meanwhile, the number of properties available for sale more than doubled to 25,441, but homes were taking 18 days longer to sell at 49 days.
Baird said the country entering lockdown in August 2021 affected year-to-year comparisons.
Seasonally adjusted annual changes in median prices for selected regions:
- Bay of Plenty $895,000 up 6.5%
- Canterbury $650,000 up 4.8%
- Waikato $780,000 no change
- Wellington $780,000 down 9.3%