The Real Estate Institute of New Zealand (REINZ) released its July survey of licensed estate agents, which is bearish and points to further sharp price declines for the country’s housing market.
Below are the key indicators presented in the survey.
First, 61% of responding real estate agents said they saw fewer people attending auctions, while 58% of agents said they saw fewer people attending open houses:
New Zealand’s median property price has already fallen 9.2% from its peak in November 2021. And a record 72% of estate agents are seeing prices fall in their areas of operation. This is a massive turnaround from eight months ago, when 70% of net agents reported prices were rising:
A year ago, Kiwi buyers were struggling with FOMO (‘Fear of Missing Out’). However, FOMO has all but evaporated, with agents reporting that only 4% of buyers display FOMO:
Along the same lines, agents are reporting declining interest from buyers at all levels, whether first-time home buyers, investors, or overseas buyers:
Finally, rising interest rates continue to be the top concern for Kiwi buyers, according to real estate agents:
Commenting on the survey, author Tony Alexander noted:
There are many negative forces at play in the housing market right now – ranging from 3% to 3.5% fixed mortgage rate increases, credit crunches, labor and construction material shortages, negative migration flows nets, collapsing FOMO and soaring FOOP (fear of overpaying). The impact so far is an 86% increase in real estate listing stock over the previous year, a drop in annual sales from 100,000 to 76,000 and an average drop in prices of 7.7% .
Results from our latest survey of licensed property professionals across New Zealand showed that conditions were as weak overall as they were last month. Certainly not stronger.
The Reserve Bank of New Zealand’s “Way Forward” forecast indicated that the official exchange rate will rise from its current level of 2.0% to 3.9% by June 2023.
If this happens, the real estate climate will collapse even more and the fall in prices will accelerate.