Property market slump deepens

Residential sales dropped 36.7% last month to 4,678 from 7,391 in July last year — the lowest for the month since 2010.

Thursday, August 11th 2022, 10:38AM

by Sally Lindsay

The latest REINZ data shows month-on-month, this was a drop of 4%. Moving from June to July, the seasonally adjusted figures show a decline of 3.5%.

All regions had an annual drop in the number of sales. However, several regions saw a month-on-month increase.

The greatest annual percentage declines were:

West Coast, dropped 54.9% annually from 51 to 23;
Auckland, down 48.7% annually from 2,767 to 1,419
Northland, down 44.0% annually from 243 to 136;
Waikato, dropped 43.5% annually from 742 to 419.

Gisborne had the highest month-on-month bump upwards, up 57.7% on June, followed by Hawke’s Bay increasing 39.4%.

Sales have been declining since July 2021, while at the same time properties listed for sale have risen a staggering 107.8% annually.

REINZ chief executive Jen Baird says the volume of stock on the market is not a result of distressed vendors — it is because buyers have stepped back; some deterred by successive initiatives to dampen investor appetite, others hampered by changes to the Credit Contracts and Consumer Financing Act (CCCFA) and reintroduction of LVRs.

Continued price drops

Prices have also continued dropping from their November peak and last month the national median selling price slipped by $40,000 to $810,000 down from $850,000 in June. This was a 4.7% drop.

Across the country the median price declined 1.8% to $810,000, a drop of $110,143 since it peaked at $920, 143 in November last year.

This is the first drop in the overall annual median price since July 2011 and has wiped out all capital gains over the past 12 months.

The median residential property price for New Zealand, excluding Auckland, increased 4.5% annually from $688,999 in July 2021 to $720,000 in July 2022. There was a month-on-month drop of 2.7% from $740,000.

The median price in Auckland was down 5.6% compared to July last year from $1,165,000 to $1,100,000. Auckland also recorded a month-on-month drop of 4.3% — down from $1,150,000 in June.

In Wellington, the median price was down 5.9% annually, from $860,000 to $809,100 in July last year.

Tasman was down 4.6% annually, from 839,000 to $800,000, Otago was down 3.7% from $670,000 to $645,000 and Manawatu/Whanganui was down 0.2% from $586,000 to $585,000.

That said, some regions are still in double digit annual median price growth. The median price in Nelson was up 16.3% on July last year, from $688,000 to $800,000, Taranaki had an increase 15.9% on the same period last year, from $535,000 to $620,000, West Coast was up 14.7% from $296,500 to $340,000 and Canterbury prices increased 13.6%, from $597,000 to $678,000.

Baird says while the median property price is dropping, affordability remains an obstacle for many — which is now being driven by rising interest rates, inflation and tighter lending criteria.

“In more affordable regions, we have continued to see significant growth compared to larger markets such as Auckland and Wellington. Buyer demand remains intact in Canterbury, and specifically Christchurch, reflected in the region’s strong performance over the past months.

“On the other hand, the Wellington market hasn’t fared so well. According to local agents, the number of attendees at open homes has fallen, days on the market have increased to 61 and sales activity has eased. Stock is staying on the market for longer and the properties selling are those where vendors have met the market.”

She says the country is in the easing part of the market cycle.

Tags: housing market