New Zealand houses take longer to sell as rates put off buyers
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NEW ZEALAND houses are taking longer to sell as rising interest rates put off buyers and listings decline, resulting in the lowest number of completed transactions in over a decade.
The median time to sell a house in September was 47 days, Real Estate Institute of New Zealand (REINZ) data showed on Thursday (Oct 13). That’s up from 37 days a year earlier and as little as 28 days in early 2021.
Property markets are slowing worldwide as central banks sharply increase borrowing costs to counter inflation. The Reserve Bank of New Zealand has hiked by 3.25 percentage points in a yearlong tightening cycle and is tipped to take the benchmark beyond 4 per cent.
House sales fell below 16,000 in the three months through June, the weakest quarter since 2010, according to CoreLogic New Zealand data. Prices have dropped by 12.6 per cent from a peak in November 2021 and economists expect further declines.
“Based on the current level of interest rates we think that house prices still have further to adjust,” said Michael Gordon, acting New Zealand chief economist at Westpac Banking in Auckland. “New listings are falling as property owners have come to accept they won’t get the prices they would have hoped for.”
Data shows that the stock of unsold houses on the market is easing because of fewer listings, Gordon said. He expects a peak-to-trough price fall of 17 per cent based on the REINZ index.
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With more price declines to come, buyers - already grappling with tighter credit conditions and higher borrowing costs - are biding their time before entering the market. BLOOMBERG
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