A collapse in buyer interest has seen the number of homes listed on Realestate.co.nz swell by 108% in August compared with a year earlier.
In turn, the number of homes on the market stands at a seven year high for that time of year. This has driven the national average (non-seasonally adjusted) asking price down by $80,700 from its January 2022 peak, with Auckland prices falling $141,352 from peak:
“In August last year our data showed the lowest housing stock in our 15 year history. Fast forward to today and we’ve seen stock double year on year, which is starting to be reflected in asking prices,” Realestate.co.nz spokesperson Vanessa Williams said.
Meanwhile, the Reserve Bank of New Zealand (RBNZ) has released mortgage data showing that buyer demand has well and truly collapsed.
The total value of mortgage commitments plummeted 30% in the year to July, down massively from the 128% growth registered at the 2021 peak:
New Zealand mortgage commitments crash.
The slump in buyer demand is unsurprising given the RBNZ’s rapid interest rate hikes.
The REINZ’s latest survey of real estate agents showed that “rising interest rates” is still the number one concern of Kiwi home buyers; albeit concerns have started to ease:
Kiwi buyers still concerned about rising interest rates.
FOMO (fear of missing out) has also been essentially absent from New Zealand’s residential property market since the beginning of this year:
FOMO gone.
The RBNZ has indicated that it will continue to hike interest rates to contain inflation.
Accordingly, home buyer demand should remain weak and house prices should continue to fall.
