"Homeownership is becoming more attainable for more Kiwis," real estate boss says
The Real Estate Institute’s latest statistics confirmed that house prices are softening, but “it’s not all doom and gloom,” said Tim Kearins, owner of Century 21 New Zealand, as “overall prices remain up on this time last year and a quieter market creates opportunities for more Kiwis to give homeownership a shot.”
Kearins’ comments follow the release of REINZ’s Monthly Property Report for May, which reported a 2.4% annual increase in median house prices across New Zealand in May. At $840,000, the national median house price was up from $820,000 in May 2021. Month-on-month, it was down 4% from $875,000 in April.
“Tighter credit conditions, higher mortgage rates, and increased housing supply continue to affect the New Zealand property market,” REINZ said. “Sales are slower to complete, property is staying on the market longer, and upward pressure on prices is easing.” The median number of days to sell now sits at 43.
Kearins noted that “properties are languishing for longer, but new listings continue to attract attention.”
“This more moderate pace also opens the doors for first-home buyers, many of which have felt locked out of the property market in recent years,” he said. “Further, prospective purchasers now have greater access to government help.”
More assistance has been targeted at first-home buyers following last month’s Budget 2022. There was the increase in house price caps for the First Home Grant and the removal of price caps for the First Home Loan scheme. These changes potentially enable thousands more Kiwis to enter the property market.
Read more: Government urged to promote its first-home buyer schemes
Across New Zealand, the number of residential property sales in May dropped annually by 28.4% from 7,758 in May 2021 to 5,556, while the total number of properties available for sale nationally rose by 77.6% from 14,883 in May 2021 to 26,435.
“For those looking to sell their property, demand for good properties remains strong,” Kearins said. “For those contemplating buying, yes, interest rates are rising but so too are rents – now at record highs. If you can get a deposit together, and with prices getting more realistic, many will see an opportunity to finally get on the property ladder.”
Kearins said imminent changes to the Credit Contract & Consumer Finance Act (CCCFA) were another silver lining.
Read next: Government changes to CCCFA locked in
“Recent expansions to the government’s first-home buyer schemes are positive, and with the CCCFA soon dialled back, we’ll hopefully see more young people secure finance and seal deals,” Kearins said. “Yes, the 2020 and 2021 froth are coming off, but the flipside is homeownership is becoming more attainable for more Kiwis.”
