The slump isn't just limited to one area, however
January is usually a slow month for house sales, but it has reached a new low for the region of Taranaki as it hit its smallest volume recorded in three decades.
According to the Real Estate Institute of New Zealand (REINZ), only 62 homes were sold last month – a drop from the already-low 71 homes sold in New Plymouth and Bell Block in January 2021.
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Garry Malcolm, Taranaki spokesman for REINZ, attributed the drop to soaring prices and credit law changes that took effect in December. REINZ also reported Taranaki house prices had a 21% annual markup from $520,000 to $630,000 in January.
“The reason the first home buyer is coming out of the market is because the price they were looking at has moved up another $50,000, $80,000, $100,000,” Malcolm said. “We are seeing standoffish buyers, first home buyers aren’t sure because it’s difficult for them.”
Taranaki isn’t short of enquiries, however. Jane Simonson, owner of Ray White New Plymouth, has revealed that there was still a significant amount of interest from aspiring homeowners, especially in New Plymouth.
Emphasizing the very real economic exclusion of the new generation, Malcolm also said first home buyers who manage to penetrate the market are often those who are backed by parental support.
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But the concern isn’t just limited to Taranaki. Other regions have experienced a similar drop in house sales, with national house sales volumes falling from 7,080 in December to 3,665 in January. The 48% plummet has REINZ alarmed since the results are “weaker than a typical first month of the year.”
Across the whole of New Zealand, only 3,655 homes were sold last month compared to the 5,135 in the same period in 2020. Auction rooms and open houses are reported to be quieter as well at this time.
