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News from REINZ
REINZ December sales data rounds off a strong year in the New Zealand property market, with prices and activity holding strong and steady. However, market headwinds are gathering strength.
Median prices for residential property across New Zealand increased by 21.5%, from $745,000 in December 2020 to $905,000 in December 2021. Though year-on-year growth continues, this was a 1.6% decrease compared to a strong November 2021.
The median residential property price for New Zealand excluding Auckland increased annually by 20.6% from $630,000 to $760,000 — a 1.3% decrease from November 2021. Additionally, Auckland’s median residential property price increased 25.9% annually from $1,025,000 in December 2020 to $1,290,000 in December 2021 — down a marginal 0.8% on November.
Seven regions including Wellington achieved record medians in December.
- Northland increased 13.0% annually from $672,500 to $760,000 — a new record median high.
- Bay of Plenty increased 27.8% annually from $720,000 to $920,000 — a new record median high.
- Gisborne increased 17.8% annually from $590,000 to $695,000 — a new record median high.
- Manawatu/Whanganui increased 23.2% annually from $525,000 to $647,000 — a new record median high.
- Tasman increased 25.2% annually from $735,000 to $920,000 — a new record median high.
- Nelson increased 23.0% annually from $675,000 to $830,000 — a new record median high.
- Southland increased 21.3% annually from $375,000 to $455,000 — a new record median high.
Nineteen territorial authorities had median price records in December. This was the lowest number since July.
Jen Baird, Chief Executive of REINZ, says: “December was a solid close to a strong year for the New Zealand property market. House prices were considerably higher than December 2020, demand and sales activity remained firm, and there was a welcome increase in new listings through November and into December.
“Across New Zealand, there was an annual increase of 21.5% in the median price, reaching $905,000 — down 1.6% compared to November 2021. New Zealand excluding Auckland saw a yearly increase of 20.6% to $760,000 — a 1.3% decrease compared to the month prior. When we consider the seasonally adjusted median prices, which assesses a month’s performance outside of predictable seasonal patterns, December price movements were as expected.
“However, we are noting signs of deceleration in annual price growth compared to previous months. While the market remains confident, the impact of rising interest rates, tighter lending criteria and changes to investor taxation restrictions are starting to shift dynamics.
“In particular, the amendment to the Credit Contract and Consumer Finance Act (CCCFA) on 1 December 2021 — which requires stricter scrutiny of borrowers’ financial health — seems to have had an immediate effect. Feedback from several regions notes a falloff in buyer numbers — particularly first-time buyers — as a result.
“Over 2022, the impact of these changes and anticipation of further interest rate increases are likely to play out in the market, leading to a gradual slowdown in the pace of price growth,” Baird observes.
Property sales down in December
The number of residential property sales across New Zealand decreased by 29.4% annually, from 9,573 in December 2020 to 6,755 in December 2021. The number of properties sold was also down 21.4% month-on-month.
For New Zealand excluding Auckland, the number of properties sold in December decreased 26.6% annually from 6,048 to 4,442. In Auckland, the number of properties sold decreased 34.4% annually — from 3,525 in December 2020 to 2,313 in December 2021. Month-on-month, there was a 26.6% decrease.
Marlborough was the only region to see an annual uplift in sales count with an increase of 5.1%. The number of properties sold in the region increased from 78 in December 2020 to 82 in December 2021.
Wellington sales decreased 33.2% from 871 to 582 — 289 fewer properties sold. This was the region’s lowest sales count in the month of December since 2013.
“Nationwide sales decreased annually by 29.4% in December 2021 and — following a strong November — there was a 21.4% monthly decrease. However, the usual holiday slowdown was less evident and there were reports of sales activity right up until Christmas.
“This may in part be due to New Zealand — and Auckland in particular — having fewer COVID-19 restrictions in terms of movement and business operations and the surge of listings in November lending to a flurry of activity in December.
“However, when we look at the seasonally adjusted numbers from November to December, we see an 11.3% drop. Adjusting for the usual seasonal trends, we do note that this result is weaker than would be typically expected.”
REINZ HPI: house values show deceleration
The REINZ House Price Index (HPI) for New Zealand, which measures the changing value of all residential property in the New Zealand, showed an annual increase of 23.3% from 3,435 in December 2020 to 4,235. This was a 1.0% decrease from November 2021.
The HPI for New Zealand excluding Auckland showed an annual increase in house values of 24.8% from 3,428 in December 2020 to 4,279 in December 2021. This was a 0.1% decrease month on month.
“While all regions show an annual increase on the HPI, fewer new highs were reached in December compared to the months prior. Further, we are starting to see the rate of increase decelerate, suggesting that buyers are less willing to pay current market prices.
“Interestingly, for the second month in a row, Wellington had the lowest annual percentage change movement on the HPI, up 18.5% to 4,278. Although this is a high number it is weaker when compared to other regions and is a significant change for the region, which ranked in the top three of all regions for 12 months between September 2020 and August 2021,” Baird adds.
Only five regions reached new highs on the index:
- Northland increased 26.9% annually to 4,397
- Manawatu/Whanganui increased 22.1% annually to 5,348
- Taranaki increased 27.2% annually to 4,715
- Otago increased 19.1% annually to 4,163
- Tasman/Nelson/Marlborough/West Coast increased 21.2% annually to 3,426.
Although Auckland’s house price value increased 21.3% annually to 4,176, the region saw the greatest decrease from its peak high — down 2.3% on the record set in November 2021.
The total number of properties available for sale nationally increased 29.7% annually — from 12,932 in December 2020 to 16,773 in December 2021.
Wellington inventory levels increased 206.6%, from 346 in December 2020 to 1,061 in December 2021. Manawatu/Whanganui increased 133.7% annually, from 315 to 736, and Hawke’s Bay increased 107.4%, from 203 to 421.
Continue reading this article at the original source from Scoop Wellington
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