In their latest report, the Real Estate Institute of New Zealand (REINZ) reveals the lingering effects of economic pressures on the nation’s property market. But despite the challenges, promising green roots may have started to appear. Read on to learn more.
Economic pressure impacting market pace
REINZ’s data from April 2023 indicates that the economic climate has continued to exert pressure on the pace of the market. According to REINZ Chief Executive, Jen Baird, median prices across the nation have moderated, inventory levels have stabilised, and sales counts have decreased year-on-year.
Overall, the data indicates a continual slowdown in market activity, a trend that is expected during this period. “April tends to be slow due to public and school holidays, and it’s clear those factors combined with a tight economy are still influencing the market,” Baird explained.
A closer look at property data
Across New Zealand, median prices have seen a decrease, while sales counts have eased.
The April 2023 median price nationally decreased 10.9% year-on-year to $780,000. However, this fall has been somewhat mitigated by increases in certain regions. The West Coast and Otago regions actually experienced an annual increase in median price, being up 8.6% to $379,000 and 3.2% to $680,000 respectively. And two districts (Grey District and Ashburton District) reached record median prices. Meanwhile, sales counts and new listings both saw a decline. The total number of properties sold across New Zealand was down 28.8% from March 2023, and down 15.3% year-on-year.
Promising signs thanks to easing of LVR restrictions
Despite the challenges, Baird reports there are promising signs of improvement. “Salespeople across the country are reporting glimpses of green shoots in the market this month as first home buyers show more interest after the Reserve Bank’s announced on the easing of LVR restrictions,” she explained.
So, is this the bottom of the market? Hard to tell at this stage, and many buyers and vendors are adopting a wait-and-see approach.
“New Zealanders are waiting for the peak of inflation, a settling in interest rates and some clarity around the outcome of this year’s election. This is what is keeping activity low. However, for those looking to buy, lower prices and good stock levels means there are opportunities as we head into the cooler months,” Baird concluded.
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