Following another decrease in New Zealand’s median property price last month, first home buyers are starting to come out of the woodwork with the easing of LVR restrictions just around the corner
REINZ’s Monthly Property Report for April saw median prices across New Zealand decrease 10.9% year-on-year to $780,000. Days to sell have risen to 47 days for April 2023 — up nine days compared to April last year.
“The numbers are not unexpected, but the good news is the Reserve Bank is set to ease LVR (loan-to-value ratio) restrictions which will help more first-home buyers into the market,” says Tim Kearins, Owner of Century 21 New Zealand.
The Reserve Bank is currently proposing to ease LVR restrictions from 1 June from a 10% limit for loans with an LVR above 80% for owner occupiers, and 5% limit for loans with an LVR above 60% for investors to a 15% limit for loans with an LVR above 80% for owner occupiers, and 5% limit for loans with an LVR above 65% for investors.
“The fact that banks will soon be able to approve more of their new lending to owner-occupiers borrowing more than 80% is good news,” says Kearins.
REINZ Chief Executive Jen Baird says 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 announcement.
“Our members are seeing further alignment as vendors come with a desire to meet the market – those who are prepared to negotiate and be realistic are the ones selling, there are buyers out there ready to buy,” she says.
Kearins says it is pretty slow, but understandably.
“Kiwis are playing a wait and see game – as to inflation peaking, interest rates settling, and of course we have a general election in October which always sees some stalling. For those looking to buy, however, opportunities are plentiful with vendors increasingly realistic.”
At the end of April, the total number of properties for sale across New Zealand was 28,643 -up 1,593 properties year-on-year.
“There is choice as well as opportunity, with properties on the market for longer. With winter only weeks away, it could be a good time for buyers to strike. Talk of a recession will see many vendors keener to sell sooner rather than later,” says Kearins.
Baird adds that we won’t know if we are at the bottom of the market until we have passed it, so for those who can get their financial ducks in a row, now is a good time to buy.
The REINZ House Price Index (HPI) for New Zealand which measures the changing value of residential property nationwide showed an annual decrease of -12.0% for New Zealand and a -10.7% decrease for New Zealand excluding Auckland.
- The national median price decreased 10.9% year-on-year to $780,000. For New Zealand excluding Auckland, median prices were down 7.3% to $700,000.
- The total number of properties for sale across New Zealand increased 5.9% year-on-year, and down 2.2% month-on-month.
- The total number of properties sold across New Zealand in April 2023 decreased 15.3% year-on-year, decreased 11.5% month-on-month.
- Nationally, new listings decreased by 18.9%, from 8,806 listings in April 2022 to 7,142 listings in April 2023.
- Days to sell have risen to 47 days for April 2023 — up 9 days compared to April 2022 and up 2 days from 45 when compared to March 2023.
- The REINZ House Price Index (HPI) for New Zealand showed an annual decrease of 0% in the value of residential property nationwide.
- Whilst prices continue to ease annually in most regions, West Coast and Otago saw increases in median sale price to $379,000 and $680,000 respectively.
- Auckland had a 15.0% decrease in the median sale price for April year-on-year and dropped under the $1m price point to $995,000.
- Six regions had a decrease in the median days to sell.
- West Coast had the highest increase in median days to sell month-on-month (42 days) and the largest year-on-year increase (46 days).
More information on activity by region can be found in the regional commentaries visit the REINZ website.
Our two biggest cities have seen ongoing year-on-year median price declines for the beginning of 2023. Auckland’s median price again dropped under $1,000,000 for the second month running.
There were no record median prices at the regional level.
Grey District and Ashburton District saw record median prices this month.
New Zealand, New Zealand excluding Auckland, Manawatu/Whanganui, Nelson, Taranaki and Wellington all had the lowest sales this month since record began.
April saw the lowest sales count in:
- Southland since 2000
- Bay of Plenty, Otago, and Waikato since 2008
- Canterbury, Northland, and Tasman since 2011
- West Coast since 2017
*Excluding the month of January and the two lockdown-affected months of April 2020 and May 2020
Days to Sell
All regions had an increase in median days to sell compared to April 2022. West Coast had the highest median days to sell since August 2020.
In terms of the month of April, April 2023 had the highest median days to sell in thirteen of eighteen regions.
House Price Index (HPI)
The HPI measures the changing value of residential property nationwide.
Wellington has been in the bottom two ranked regions eighteen months in a row for the year-on-year HPI movement.
Manawatu-Whanganui and Nelson/Marlborough/Tasman/West Coast regions had their second largest year-on-year drop in HPI since records began.
Bay of Plenty and Waikato had its third-largest year-on-year drop in HPI since records began.
Otago is the top-ranked HPI year-on-year movement this month; Southland is second and Canterbury is third.
Four of fifteen regions (27.0%) had at least a 20.0% year-on-year increase in inventory.
Six regions had less inventory than they had one year ago.
All regions had had a decrease in listings since April 2022.
Eleven of fifteen regions (73%) of the regions have had listings decrease by more than 15% year on year.
Inventory and listing data come from realestate.co.nz.
Nationally, 9.6% (395) of properties were sold at auction in April 2023, compared to 14.6% (736) in April 2022.
New Zealand excluding Auckland saw 6.6% of properties (192) sell by auction compared to 10.6%
(359) the year prior.
More information on activity by region can be found in the regional commentaries visit the REINZ’s website.