Prices drop 4% in last three months
There are no signs that the New Zealand housing price slump is about to end any time soon.
CoreLogic has revealed that in the three months to September, New Zealand experienced a 4.1% price decline – one of the worst periods for national value falls on record, with the housing downturn unlikely to end in the near future.
CoreLogic revealed property values continued to decline across all six main urban centres in September, with Wellington continuing to experience the weakest performance. Values across the broader capital area (including the Hutt and Porirua) fell -2.5% over the month and 8.5% over the quarter.
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Wellington mortgage adviser Michael Anastasiadis (pictured above), of Bozinoff Mortgages & Insurances and one of NZ Adviser’s Top Advisers in 2022 and 2021 said the usual increase in spring listings has not occurred this year in his local area or surrounding suburbs.
“I think less people are considering selling and [are] holding off selling unless they have to as people have been seeing the prices come down each month,” Anastasiadis said.
“The trend I am seeing is people are holding off until the market improves.”
Anastasiadis said most of the clients he was currently working with were first home buyers or those looking to upsize to a larger home (subject to the sale of their current property).
“New builds seem to be too expensive for most at the moment and some buyers are worried about delays to completion dates and any increased costs compared to the existing properties that they can buy now,” Anastasiadis said.
“Plus, they have the added opportunity to add value to them.”
Anastasiadis said last week’s Reserve Bank cash rate hike had resulted in lending tightening again and mortgage stress increasing.
“As a result of last week’s rate rise, the mortgage servicing stress test rates have continued to increase making it harder again for those wanting to get into the market,” he said.
“The biggest problem my clients are experiencing right now is not finding a property or having an issue with the price of the property – it’s that the bank is not lending them the same amount of money they previously would have been approved for.”
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CoreLogic head of research Nick Goodall said as interest rates have increased and credit was harder to attain, the housing market was firmly in retreat following an exceptional period of growth.
“Despite the rate of decline easing in September, it’s probably too early to suggest the housing market has moved through the worst of the downturn,” he said.
“With the official cash rate expected to rise further into 2023 due to strong economic performance and persistently high inflation, further hikes will likely prolong current downturn.”
