New median house price high comes as opinion shifts on future of property market
REINZ’s latest report has revealed that while New Zealand property prices continue to grow, advisers and buyers should expect a slowdown sooner rather than later.
Jen Baird (pictured), CEO of REINZ, told New Zealand Adviser that the numbers were still positive – including a new record high median property price for New Zealand – but the feedback from those on the ground was that market sentiment was changing.
“The high line is that the number of properties sold in November, and the prices that they sold for, continue to go up,” she said. “That trend is continuing: there were 8,321 sales made last month and the median house price is at record national levels of $925,000, up 23% on November last year.”
“The sales number is interesting as it is still relatively low for a November. In seasonally adjusted terms, it’s not where it normally would be. We’ve had 40% more property hit the market in November compared to October, and obviously that was impacted by the lockdown.
Read more: Auckland property prices likely to fall in near future
“That significant increase in new listings, and therefore the increase in stock, is welcome news for buyers.”
According to Baird, there is some likelihood that the locked down regions of New Zealand will see property prices rebound once restrictions are lifted.
“It’s an interesting time and there’s a whole load of things converging here,” she said. “What we saw in the early part of the lockdown wasn’t really the handbrake that we’d seen in lockdown last year, and activity still continued: even in Auckland, even when there were heavy restrictions.
“Once the rest of the country came out of lockdown, we saw a fairly standard spring market happen in October. But Auckland, Northland and Waikato – which are big markets – have some catching up to do. We saw some of that happen in November.
“I don’t know if I would call it a bounce, because activity didn’t drop to the degree that it did in March 2020, so it’s not so much a bounce as much as a catch up.”
Buyer sentiment shifts despite hot New Zealand property market
Baird, who sits atop an organisation with 16,000 members, including 95% of all licensed real estate agents in New Zealand, said that the REINZ membership was already telling her that the boom would end sooner rather than later.
“What is interesting this time is that, in spite of that steady growth in numbers, sentiment seems to be changing,” she said. “What we are hearing from them is that even though the numbers are what they are, they are starting to hear sentiment changing.
“First home buyers are stepping back, because the market has moved too fast for them now. We are all hearing the clear signalling that the OCR is likely to increase further next year.
“Banks are tightening their lending criteria, which is making it more difficult for people to get the money that they are looking for, and the impact of the measures that the government put in place earlier this year to moderate the market are starting to have an impact.
“After a strong year, there are some signs that the market is stabilising – but currently they are sentiment signs.”
