New Zealand house prices crash back to 2017
The Reserve Bank of New Zealand lifted the official cash rate by 25 basis points to 2.75% on 2 September – its second increase in two months. The decision appears to have further dented confidence in the housing market, with New Zealand home prices continuing to fall 1.5% year-on-year, according to the Real Estate Institute The post New Zealand house prices crash back to 2017 appeared first on…
The Reserve Bank of New Zealand recently raised the official cash rate by 25 basis points to 2.75%, marking its second increase in two months. This decision has contributed to further declines in New Zealand's housing market, with home prices falling 1.5% year-on-year, according to the Real Estate Institute of New Zealand’s leading house price index.
Following a peak in November 2021, New Zealand housing prices have been in decline for nearly five years, with most of the decline occurring within the first 18 months and values now largely stagnant. Consequently, real inflation-adjusted housing prices have returned to mid-2017 levels. The outlook for housing prices in New Zealand is grim, exacerbated by the Reserve Bank's tightening cycle and a surge in for-sale listings, which are at their highest level in over a decade.
This surge coincides with a 11.6% annual decline in sales volumes and a 3-day increase in the median days to sell. Buyer psychology has shifted from fear of missing out (FOMO) to fear of overpaying (FOOP), a trend that may soon mirror that of Australia, where a deep and prolonged price correction is anticipated.
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