New Zealand houses are selling faster as buyers return to the market
NEW Zealand houses are selling faster as signs that interest rates may have peaked encourage more buyers to enter the market.
The median time to sell a house in December was 36 days, Real Estate Institute of New Zealand (Reinz) data showed on Thursday (Jan 18) in Wellington. That is the lowest since March 2022 and down from a peak of 60 days in February last year.
House prices in New Zealand are recovering after a prolonged slump that coincided with a steep rise in mortgage interest rates. Prices in December rose 0.5 per cent from a year earlier – the first annual gain since June 2022, the institute said on Thursday.
The recovery comes amid expectations the Reserve Bank of New Zealand (RBNZ) may be finished raising the Official Cash Rate (OCR), while the warmer spring weather traditionally revives buyer interest. Demand has also been stoked by the success of centre-right parties in the October election because they campaigned to reinstate tax breaks for landlords.
While the RBNZ has projected it will not cut the OCR until 2025, investors expect a cooling economy will result in policy being loosened much sooner and are betting the benchmark will fall to 4.5 per cent by the end of 2024 from 5.5 per cent currently.
There are tentative signs that mortgage rates are near their peak with two-year fixed-term products priced at 6.89 per cent across the largest lenders compared with more than 7 per cent in November.
“Many local agents are reporting signs of growing market confidence and activity now that the new government has begun releasing details about its plans, and interest rates have stabilised,” said Jen Baird, chief executive at Reinz. “It’s clear more buyers and sellers feel that now’s the time to act.”
House sales in December rose 14 per cent from a year earlier, the institute said. The stock of houses available for sale at the end of the month was down about 11 per cent from November as listings slowed.
“The listings figure is likely to reflect some vendors taking a wait-and-see approach and holding off until the new year,” said Baird. “Local salespeople are getting strong levels of enquiry from potential sellers, so we expect to see listings across New Zealand lift in the next few months.” BLOOMBERG
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