The latest REINZ (Real Estate Institution of New Zealand) data was released last week on the 18th of January regarding the position of the housing market. It particularly focused on year on year data showing the difference between December 2021 and December 2022. This week I will unpack this data and focus on the key statistics and takeaways to look at from it.
Firstly I must say two things; December is a weird month for Real Estate due to everything almost shutting down usually around the 20th of the month and also keep in mind that December 2021 was likely the very peak of the steep incline we had in house prices due to that period. Keep these in mind when looking at any of these statistics.
House values have fallen on average 12.2% across the board from December 21 to December 22 down to $790,000. Interestingly enough when you look at this by region it is far from linear. Wellington and Auckland had the two largest drops by region with 20.2% and 18.0% respectively. This is not really a surprise as both regions saw massive increases over the boom period. In other major regions Bay of Plenty dropped only 5.1% and Canterbury only 3.7% much less than the national average of 12.2%.
Median days to sell is now at 40 days on market, this means from when the property is listed live on the market to the day the property goes unconditional. In some areas like the Bay of Plenty it is currently out further than that at 52 days.
It may come as no surprise that the total sales count in December 22 was down 39.0% on December 21. This means that there was well over a third less sales. Gisborne had the highest drop of all at a whopping 60% drop in sales count.
The price distribution of sales prices naturally trended downwards. The most active range was $1 million plus sales decreased from 41.7% in December 21 to 30.6% in December 22. $500,000-$749,999 increased from 24.7% in December 21 to 30.1% in December 22.
Another interesting statistic was the decline of the auction sales method. Nationally only 11.7% of properties sold under the hammer in December 22, as opposed to 30.4% in December 21. This is due to a multitude of factors, none more so than a tightening on borrowing regulations meaning a lot less cash unconditional buyers in the market. Just to add, I also think of the buyers who were unsuccessful at purchasing a property during the last couple of years a large majority were probably burnt big time by an auction at some point during that period. Expect a low level of auctions for the foreseeable future.
There are reports that inflation has not decreased enough for the RBNZ (Reserve Bank of New Zealand) to be satisfied resulting in probably another interest rate hike to come. This would mean a little bit further to go until we reach the bottom of the market. As I have said consistently though, do not try and time the bottom of the market. If you see the property of your dreams buy it and don’t look back.