"March's real estate statistics show that, overall, house prices remain up on the same time last year, but things are slowing," says Tim Kearins, Owner of Century 21 New Zealand.
His comments follow REINZ releasing its Monthly Property Report for March – a month which saw median house prices across New Zealand up 7.9 % compared to the same time last year. REINZ noted that 'while we continue to see prices increase annually - in all but one region - the rate of growth is slowing.'
At $890,000, the national median house price is up from $825,000 in March 2021, and up from $885,000 the previous month – February.
"Let's not forget we've come off the back of a crazy couple years. House prices soared to unsustainable levels and money was cheap. What we are now seeing is some of those unrealistic gains being clawed back. At the same time, good properties in strong demand continue to make great money," says Mr Kearins.
The Century 21 boss says New Zealand's real estate market was badly affected over summer by the Credit Contract & Consumer Finance Act (CCCFA). It required banks and brokers to conduct ultra-conservative assessments on all new borrowers, with the number new mortgages falling through the floor.
Last week, the Ministry of Business Innovation and Employment (MBIE) released the draft proposed changes to the CCCFA, with public consultation closing on 20 April. The final changes are then set to be enacted in June.
"People still want to buy houses. These softer March numbers, however, reflect the fact that borrowers have been smacked with biggest credit crunch since the Global Financial Crisis. Some significant tweaks to the CCCFA this winter will hopefully enable more Kiwis to realise their homeownership dreams," says Mr Kearins.
Across New Zealand, the number of residential property sales decreased 33.5% from 10,151 in March 2021 to 6,752. At the same time, the total number of properties available for sale nationally increased 32.0% from 19,437 in March 2021 to 25,659.
"Listings are up, and sales are down which means advertised properties are sitting around for a bit longer. We are now seeing, however, vendors getting more realistic with both parties increasingly arriving at a satisfactory place," he says.
Mr Kearins says the Reserve Bank's latest increase to the Official Cash Rate by 50 basis points to 1.50% - marking the fourth consecutive OCR hike since October last year and biggest jump in over 20 years - also needs to be put in context.
"Interest rates remain a lot lower than they have been in the past, while servicing a mortgage remains comparable, if not cheaper, for many paying sky-high rents.
"It's not a buyers' market yet, but for those who can secure lending there are some great opportunities out there this autumn," says Tim Kearins.