“As the largest city in New Zealand, we generally see property trends driven by Auckland. But with 13 of our 19 regions seeing an increase to new listings last month, it seems regional New Zealand led the way in February,” says Vanessa. Auckland saw steady price growth in 2012 and 2013 but was only a fraction of its previous decade’s peak with a 98.0% increase in the average asking price. Gisborne, Coromandel, Waikato, and Bay of Plenty also saw impressive average asking price growth with increases of 123.4%, 121.9%, 117.5% and 117.2%, respectively.
Tighter lending limits and changes to credit rules are resulting in slower house price growth, the Real Estate Institute says. He stated that data from the past few decades has shown that house prices are at their highest relative to incomes. The poll found that 81% of Kiwis nationwide thought house prices were too high, with the figure rising to almost 90% in Wellington. However, 74% of South Islanders thought house prices were too high, and 18% thought prices were about right, compared to 12% nationwide, and 10% in Auckland and Wellington. “No one is suggesting that a collapse of the housing market would not be acceptable. However, we cannot afford to see year after year these dramatic rises in prices.”
Loan-to-value ratios have returned, new Credit Contracts and Consumer Finance Act rules – which make accessing lending harder – are in place, and the Reserve Bank is consulting on debt-to-income ratios. He said that this would have an impact on spending habits because of tightening belts. This could lead to some mortgage-holders who purchased investment properties or holiday homes to radically rethink their assets. However, tighter credit conditions, rising material and labour costs and lengthy supply chain delays had dampened demand among developers.
Both Manawatu/Whanganui and Wellington recorded over twice as much inventory in January 2022 compared to the same period last year, with increases of 121.3% and 111.6% respectively. In January, listings were down 1.7% across Aotearoa, indicative of a slowdown in the number of sales. The reduction in listings was driven by Auckland — for New Zealand excluding Auckland there was a 5.4% increase. Property valuation company Valocity points to five key factors that could make 2022’s property market very different. The average national value is now 2.1% higher than it was in the last three months 2021, reaching $1.01m. “Last month we saw strong prices Otago, Southland, and Canterbury. In March these regions are down — an indication of what is happening across this country.”
However, high house prices together with rising interest rates and new rules that made it harder to be approved for a bank loan had reduced “the pool of buyers who are willing and able to pay market prices”, Baird said. New Zealand’s residential property sales fell by 28.6% from 5,135 in Jan 2021 to 3,665. Although market activity is expected decrease over the holiday period due to the holiday season, the seasonally adjusted figures show a 5.3% drop from December to January. Allowing for the usual seasonal trends, this January is weaker than a typical first month of the year. CoreLogic data shows that median house values have fallen by 150 in the last three month in 150 of the 900 suburbs in the country. This is a sign of a slowdown in the housing market.
“That is the key if you are buying and selling in the same market then you are in a good position, and because the market has evened out somewhat it means there is less risk of putting your home on the market prior to buying. Auckland saw a 32.2% decrease in the number of properties that were sold each year — from 1,951 in Jan 2021 to 1,323 January 2022. The story of the Auckland, Wellington, and Christchurch industrial and logistics markets is consistent. High demand and low availability of stock and limited opportunities for development continue to apply upward pressure on industrial rental rates. Implement tools, processes, and strategies that improve the value and performance of your real estate. Read more about Candace Williams here. Jones Lang Lasalle can design and deliver real estate projects.
High commute times and traffic make inner-city properties more attractive, which increases demand and pushes prices up. The Manurewa–Papakura local council has the lowest house prices at just $1,016,000. Each area represents a different suburb, and the colour of the area represents how quickly house prices have increased over the past 20+ years. REINZ specializes in all aspects of real estate, including residential sales, rural auctioneers, business broker, commercial and industrial sales, leasing, and residential property management.