The fall in house prices accelerated in July, according to data from CoreLogic, with Christchurch also turning negative.
Nationwide house prices have fallen every year for the first time since 2011 and are now down more than 10% from the market peak, according to new figures from the Real Estate Institute.
In Auckland, the median price fell $200,000 from its peak.
The nation’s median price fell 1.8% annually to $810,000 in July from $825,000 in the same period last year. It fell 4.7% from $850,000 in June.
Of the five regions that recorded annual declines in the median price, Auckland and Wellington recorded the largest.
Auckland’s median was down 5.6% to $1.10m in July from $1.16m last year, while Wellington’s was down 5.9% to $809,100 from $860,000 last July.
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Other regions where median prices fell each year were Tasman, down 4.6% to $800,000; Otago, down 3.7% to $645,000; and Manawatu/Whanganui, down 0.2% to $585,000.
Kiwibank senior economist Jeremy Couchman said the figures showed the market had been another “wet month”.
The first annual price drop may seem like a shock, but it means prices only fell to levels seen in May last year, he said.
“But the quiet market appears to be deterring many potential sellers from quoting, and the drastic tightening of credit conditions over the past year continues to weigh on the market and will for some time.
“The slow data suggests that prices need to fall further in 2022. We expect the institute’s house price index to fall by 10% to 11% by the end of the year.”
Infometrics senior economist Brad Olsen said Auckland was a key driver of weaker prices, with underlying prices in the region down 15% from their peak in November 2021, against a 6% drop outside Auckland.
At the height of the Auckland market in November, the median price was $1.30 million. It had now fallen $200,000 to a median of $1.10 million in July.
While the domestic market continued to decline, prices across the country were still 18% to 43% higher than the same period in July 2020, before the housing market recovered significantly, it said. -he declares.
“With mortgage rates continuing to rise, getting a real estate deal is expected to remain difficult as buyers remain cautious about overpaying in a declining market, but are also constrained in the loans to which they can access.
“Sellers will have to keep adjusting their prices downward if they want to make a sale.”
Some regions still saw strong annual increases in the median price. Nelson rose 16.3% to $800,000, Taranaki rose 15.9% to $620,000, West Coast rose 14.7% to $340,000 and Canterbury rose 13.6% to 678 $000.
But the institute’s house price index, which measures changes in property values, rather than just sales, showed that prices in all areas had fallen from their market peak and that the national median was down 10.8% from its highest point.
Auckland’s median was now 15.7% below its November peak, while Wellington’s had fallen 16.2% from its October peak. Canterbury’s median was down 5.6% from its peak.
Real Estate Institute chief executive Jen Baird said the decline in the annual median price movement for New Zealand as a whole was the first since July 2011.
There was a significant rise in prices after the initial Covid lockdown in early 2020, which peaked in November last year, she said.
“Real estate markets are cyclical, and after a period of strong upward movement, the market slows down.
“But while the median price shows an annual decline, affordability remains a barrier for many – due to rising interest rates, inflation and tighter lending criteria.”
Markets in more affordable regions are doing better than larger markets like Auckland and Wellington, she said.
“Buyer demand remains intact in Canterbury, and more specifically in Christchurch, as evidenced by the region’s strong performance over the past few months.”
There were 7,391 sales nationwide in July, down 36.7% from last July and 4.0% below June.
Sales fell every year in all regions, with the biggest declines on the West Coast (down 54.9%), Auckland (down 48.7%), Northland (44.0%) and Waikato (down 43.5%).
Several regions recorded a monthly increase in sales in July. In Gisborne and Hawke’s Bay, sales increased by 57.7% and 39.4% respectively.
Baird said rising interest rates, inflation and supply chain-affected cost structures are contributing to the current market dynamics as people have been cautious, which has slowed demand. .
At the same time, the number of properties available for sale has increased significantly, up 107.8% compared to last year.
But the increased volume of inventory in the market is not the result of struggling sellers, she said.
“High employment and bank lending conservatism continue to support homeowners’ ability to manage the impact of rising interest rates.
“Rather, it’s because buyers have backed off: some discouraged by moves to curb investor appetite, others hampered by the Credit Agreement and Consumer Finance Act and the reintroduction of loan ratios. -value.”
Last year saw low housing stock, growing competition among buyers and a general sense of urgency, she said.
“The reverse is happening. Buyers have more choice and more time to consider their options, undertake their due diligence and find the right property for them.
The sales process was taking longer, with the median number of days it takes to sell a property now at 47, but there were serious buyers ready to make offers, Baird said.
“While the market has been dominated by homeowners, agent reports suggest that first-time home buyers (and, in some areas, investors too) are beginning to reappear, again increasing the pool of buyers. “