At the end of April 2022, New Zealand began to see a slow in house sales across the country. NZ property marketplace, Shopless has looked into the current causes of this housing market stall and how different groups in the property market are affected by a slowdown.
For a number of years the housing prices have seen new heights in the prices and property turnover. Incrementally each region of New Zealand has seen a rise in the average house price, with the national average increasing by 30% last year – with similar jumps in the previous years. Figures on QV showed a new national average house price for 2021 of $1,053,315. However with rising mortgage rates in 2022, and a slow in home listings coming on to the market in March has led to a stall in the housing market. This market stall is impacting a range of New Zealanders in different ways.
First home buyers and those looking to buy within a standard to low end budget are the starting factor in a rise in mortgage rates. Creating a hesitancy to buy and in-affordability for potential buyers. The Guardian Newspaper suggested that housing prices in NZ were experiencing the largest quarterly drop in the past 10 years. However while a drop appeared to be good news for first home buyers, different factors were contributing to unaffordability. With potential buyers affected by a high cost of living, rising costs in building supplies, a rise in interest rates and more.
In another bracket of the market, investors and developers in New Zealand have started to cut the costs of their property asking prices. Not only causing the housing market to slow, but also slowly bringing the house prices down. A discouraging prospect for home owners or property owners looking to sell in the next year or two. Despite a long term stall, predicted economists are still positive about the state of the housing market. Core Logic Economist Kelvin Davidson stated that the volume of house sales have the potential to decline by up to 10%. Categorising the stall as a “slowdown” in the market rather than a “serious downturn”.
For viewing current home listings or selling a property, Shopless is an online marketplace for New Zealand real estate listings.