C21 New Zealand News

Prices Softening But Opportunities Increase

BY TIM KEARINS,

CENTURY 21 NEW ZEALAND

Unsurprisingly, the Real Estate Institute’s latest statistics confirm house prices are softening. However, it’s not all doom and gloom. Overall prices remain up on this time last year and a quieter market creates opportunities for more Kiwis to give homeownership a shot.

Recently REINZ released its Monthly Property Report for May – a month which saw median house prices across New Zealand increase 2.4% annually. At $840,000, the national median house price is up from $820,000 in May 2021. Month-on-month, saw a 4.0% decrease from $875,000 in April.

REINZ noted: ‘Tighter credit conditions, higher mortgage rates and increased housing supply continue to affect the New Zealand property market. Sales are slower to complete, property is staying on the market longer and upward pressure on prices is easing.’ The median number of days to sell now sits at 43.

Properties are languishing for longer, but new listings continue to attract attention. This more moderate pace also opens the doors for first-home buyers, many of which have felt locked out of the property market in recent years. Further, prospective purchasers now have greater access to government help.

Following last month’s Budget 2022, more assistance has been targeted at first-home buyers. House price caps for the First Home Grant were increased and the First Home Loan scheme price caps were entirely removed. The changes potentially enable thousands more Kiwis into the property market.

Across New Zealand, the number of residential property sales in May decreased annually by 28.4% from 7,758 in May 2021 to 5,556. At the same time, the total number of properties available for sale nationally increased 77.6%, from 14,883 in May 2021 to 26,435.

For those looking to sell their property, demand for good properties remains strong. For those contemplating buying, yes interest rates are rising but so too are rents – now at record highs. It you can get a deposit together, and with prices getting more realistic, many will see an opportunity to finally get on the property ladder.

Another silver lining will be the imminent changes to the Credit Contract & Consumer Finance Act (CCCFA) which since late last year has seen banks apply ultraconservative assessments on new mortgage applications.

Recent expansions to the Government’s first-home buyer schemes are positive, and with the CCCFA soon dialled back, we’ll hopefully see more young people secure finance and seal deals. Yes, the 2020 and 2021 froth is coming off, but the flip side is homeownership is becoming more attainable for more Kiwis.`

Tim Kearins – Century 21 New Zealand – (0274) 495-547 tim.kearins@century21.co.nz

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