Housing market continues to take a battering

It was another bloodbath in the housing market during May, according to the latest REINZ market data.

Wednesday, June 15th 2022, 11:40AM 2 Comments

by Sally Lindsay

Tighter credit conditions, higher interest rates and a sharp increase in supply are hammering the market. Sales are slower to complete, property is staying on the market longer and prices are dropping.

House prices are now down 6% from last November’s peak and sales across the country sales are 28.4% down on last year.

The national median selling price dropped from $875,000 in April to $840,000 — a $35,000 decline  and a month-on-month drop of 4%..

The median property price for New Zealand, excluding Auckland, dropped 3.3% from $755,000 in April to $730,000 in May.

In Auckland’s expensive central suburbs the median price dropped from $1.3 million in April to $1.18 million in May - a decline of $120,000., while the median price on the North Shore dropped  $145,000 in May going from $1,450,000 in April to $1,305,000.

Across the whole of Auckland region there was negative growth. The median price across Auckland region has dropped 13.5% since its peak of $1,300,000 in November last year. In the six months prior, median property prices had increased 13%.

Auckland’s median price was down 2.2% compared to May last year, from $1,150,000 to $1,125,000. The last time the annual median price dropped in Auckland was October 2019, when it was down 0.1%. The region also recorded a month-on-month drop of 3.9% — down from $1,171,000 in April.

The West Coast is the only region to achieve a new record median price, reaching $395,000 — up 30.8% from $302,000 at the same time last year. This was the first record price in the region since December 2021. Overall, the month had the least number of record median prices during a May month since 2019.

Apart from the deep south, house prices fell across the country. The REINZ House Price Index (HPI) fell 0.8%, the sixth consecutive monthly fall and annual house price growth slowed to below 4%. Since peaking in November, the seasonally adjusted HPI has fallen 6%.

Sales too, seasonally adjusted, across the country fell in the month and were down 28.4% on a year ago.

The median number of days to sell at 40 days managed to tick over the long-run average of 39 days.

As buyers sit out the carnage from ringside, the supply of listed property trends higher. Rising interest rates are a big reason for the rapid cooling in the market.

REINZ chief executive Jen Baird says the seasonally adjusted figures from April indicate a greater drop than expected.

“With the exception of the West Coast, median prices in the regions have come off their peak. Auckland is the only region to see an annual decrease in median price — down 2.2% on the same period last year.

Kiwibank says all the above indicates that house price falls are yet to plumb the lows of the current cycle. The bank continues to forecast that house prices will fall 10-11% by the end of this year before a muted recovery from late next year.

Tags: REINZ

« Seven months of profits gonePatchy housing market shows widespread falls as well as some increases »

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Comments from our readers

On 15 June 2022 at 11:39 pm Michael Donovan said:
Yes
Yes
and YES
I agree with your reasoning and statements and claims.

Y'know, this needs to be realised as being just the 'embryo' stage of house price falls.

I started bleating Fed Reserve has dumped a whopping .75 base points rise to their interest rates.
The USA is well and truly bankrupt Zealand

We have our own debt site here in NZ

Sharemarkets have already lost 28% of their 'golden glow' so get well poised for the second (bigger) drop.

It won't be a depression....it'll be much more serious than that.......more like a DEPRESSION
Most people know the rules?

X number of consecutive negative GDP rates = a Depression

We are currently suffering the after-effects of excessive currency-printing during the last couple of years, as an attempt by our government to stave off and subsidise us from some claimed pandemic.

Now, the 'blissfully Ignorant' are wandering with glazed looks in their eyes, wondering where on earth the increased costs of living phenomenon has reared it's head from.
Most of them give the 'phenomenon' a name........INFLATION

But we know better don't we?
It is really the DEPRECIATION of our NZ currency resulting from all those hundreds of billions of NZD's that our leader organised to be printed and subsequently released into our monetary system, the team in Wellington could try and look like a saving saint rescuing multitudes of businesses from lockdowns for a handful of people with a bad cold.

Now, we are meant to be blind to reports of daily numbers of 10,00 or 20,000 'cases, and 25 deaths of people WITH c19....
NOTE: We notice the fact that it states those daily death numbers of people WITH the dreaded lurgy....not OF the lurgy

So, we are going to suffer from the fallout from overseas, as they also try and realise what has happened in their economies.....just as we are living with here in little old New Zealand.

Remember they used to say "they get a cold and we get pneumonia?"

Bit of a "catch phrase" really....isn't it?

I still reckon we can 'look forward' to a drop in house prices here approaching 40% off their peak?!
Again....that is now in writing.
On 17 June 2022 at 11:44 pm Michael Donovan said:
Apologies....sorry sorry

A few typos in my post this week on Wednesday 15 June

And, this site doesn't seem to be able to start new sentences or paragraphs on new lines.?

Here it is again with corrections.....

Yes Yes and YES I somewhat agree with your reasoning and statements and claims.

Y'know, this needs to be realised as being just the 'embryo' stage of house price falls.

I started bleating about house price falls around TWO years ago on this site.

The Fed Reserve has dumped a whopping 75 base points rise to their interest rates.

The USA is well and truly bankrupt.......re-check my old screen saver, ....usdebtclock.org

We have our own debt clock site here in NZ. Sharemarkets have already lost 28% of their 'golden glow' so get well poised for the second (bigger) drop. .

It won't be a RECESSION....it'll be much more serious than that.......more like a DEPRESSION

Most people know the rules?....... X number of consecutive negative GDP rates = a Depression.

We are currently suffering the after-effects of excessive currency-printing during the last couple of years, as an attempt by our government to stave off and subsidise us from some claimed pandemic.

Now, the 'blissfully Ignorant' are wandering around with glazed looks in their eyes, wondering where on earth the increased costs of living phenomenon has reared it's head from.

Most of them give the 'phenomenon' a name........INFLATION .........................

But we know better don't we?

It is really the DEPRECIATION of our NZ currency resulting from all those hundreds of billions of NZD's that our leader organised to be printed and subsequently released into our monetary system, the team in Wellington could try and look like a saving-saint, rescuing multitudes of businesses from lockdowns for a handful of people with a bad cold.

Now, we are meant to be blind to reports of daily numbers of 10,000 or 20,000 'cases, and 20 deaths of people 'daily' ... WITH c19, yet NO LOCKDOWNS??? ..................

NOTE: We notice the fact that it states those daily death numbers of people WITH the dreaded lurgy....not OF the lurgy

So, we are going to suffer from the fallout from overseas, as they also try and realise what has happened in their economies.....just as we are living with here in little old New Zealand.

Remember they used to say "they get a cold and we get pneumonia?

Bit of a "catch phrase" really....isn't it? I still reckon we can 'look forward' to a drop in house prices here approaching 40% off their peak?!

Again....that is now set in writing,.....prior to the event!.

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