Full article below as written on Stuff:
By Melanie Carroll
Auckland, Wellington and Waikato are now buyers’ markets, and more regions may follow as prices fall, according to property listings website Realestate.co.nz.
The national average asking price fell 0.9% to $934,538 between July and August. That was down from just over $1 million in January, when the average asking price had doubled in a decade.
Asking prices had retreated to 2021 levels in eight regions. However, two regions, Taranaki and the West Coast, had record high asking prices last month.
Spokesperson Vanessa Williams said the market had pulled back from record highs earlier this year, but the past two years had been unusual which made comparisons difficult.
The exponential growth that we’ve had over this past 24 months, it just wasn’t sustainable. So we’re actually coming into a more normalised market, operating in a more sustainable way,” she said.
“I think that I do think that we’re in a less frantic market, and I do think that that will probably continue for the rest of the year.”
Compared with August 2021, the average asking price in Wellington fell 6.0% to $903,997, fell 3.1% in Hawke’s Bay to $787,344, was down 1.6% in Manawatu/Whanganui to $627,564, and fell 0.7% in Nelson and Bays to $877,734.
The average asking price rose in Auckland (up 0.4% to $1.18 million), Northland (up 0.7% to $875,825), Southland (up 1.1% to $512,894), and Coromandel (up 1.1% to $1.16m).
The number of homes available for sale in August was more than double a year earlier, at 25,441, although Williams noted the country was in level 4 lockdown for part of August 2021.
Houses for sale were down on July’s 26,358, and below the year’s high in April of 27,000, but numbers were still healthy, she said. New listings of nearly 7500 were flat compared with July.
A number of factors were weighing on the market. Borders were now open and people wanted to spend their money on something other than property; interest rates were rising, and the supply of houses was also rising.
Less available credit because of higher rates meant buyers were not budging as much on what they would pay for a property, Willams said. That meant sellers’ expectations had to become more realistic, which had an impact on prices as well.
“Unless there are some massive legislative changes, or we see interest rates double, I don’t see the trends changing particularly much,” she said.
“I think there was a time there where sellers certainly were in the power position when it came to the transaction. But what I think we all forget is that it’s all good and well to be a seller, but then typically you’re a buyer.”
With Auckland and Wellington buyers’ markets, other bigger centres were likely to follow eventually.
However, Hawke’s Bay and Gisborne, which had previously been buyers’ markets, tipped back into sellers’ favour in August.
“As the market continues to shift, we’ll likely see these rises and dips in market sentiment across the country. These shifts are likely to continue as we head into the warmer months of spring,” she said.
In Auckland, asking prices for apartments cooled in August, with a 9.9% decline in average asking prices to $695,762 compared with a year earlier.
ASB warned on Wednesday that New Zealand may be just over halfway through one of the biggest drops in nominal house prices on record.
The bank’s economists said in their latest quarterly economic forecast that house prices were expected to continue to fall until mid next year and the official cash rate would peak at 4% by the end of the year before falling in 2024.
