Report finds house prices continue to fall
House prices are showing no signs of levelling off in Manawatū, according to a recent report from REINZ.
The REINZ April 2022 market report shows Palmerston North saw the median price dip by 4% from $700,000 to $672,000. The city also saw a 28% decrease on the number of sales.
In Feilding, while median house prices increased slightly to $658,000, the number of houses sold fell from 30 sold in March to 22 sold this month.
REINZ ambassador for Palmerston North Andy Stewart said he thinks it’s more of a market correction than a cooling period.
‘‘It’s not so much a price reduction as an adjustment in prices. Ultimately, if people are buying and selling in the same market, the house they’re buying will drop at a similar rate to the house they’re selling so the impact is being felt across the board.
‘‘These are cyclical events and after the growth we saw over the past year, a correction like this was inevitable. It’s going to be hard to predict when prices will plateau.’’
Stewart also said first home buyers and investors were almost nowhere to be found, with banks making the criteria for borrowing much stricter.
The month’s price and sale rate decrease has been seen across a range of properties from urban residential to semi-rural, although Stewart says the mid to high price level of the market has remained relatively stable.
Century 21 agent Tim Kearins said after historic price increases over the past year, prices had to come down.
‘‘I don’t agree that it’s a buyers market, I think it’s more of a stalled market. The concern is that people might not consider that if they wait around, interest rates and mortgage thresholds could get worse.
‘‘People really have to weigh up their financial situation. Is it still better to save up for a deposit, get a mortgage at the current interest rates than deal with regular rent increases? If you can afford it, I think it still is the best option.’’
Kearins said that although interest rates are higher than they’ve been in the last few years, they’re still well below the historical average New Zealand has experienced in decades past where interest rates below 10% were a rarity.
Across the country, April 2022 saw property sales decrease by 35.2% compared to April 2021 while the number of listed properties increased by 70.8%.