What’s going on in the housing market?

The New Zealand housing market has been undergoing a series of changes in recent years, and the year 2023 has brought a new set of challenges. One of the most significant trends is the increase in interest rates, which is putting pressure on both buyers and sellers in the market. In addition, house prices have been experiencing downward pressure, while it takes longer to sell a house.

The Reserve Bank of New Zealand (RBNZ) has raised the official cash rate in response to inflationary pressures in the economy. This has led to an increase in mortgage rates, making it more expensive for buyers to enter the market. While interest rates are still relatively low compared to historical averages, any increase can make a significant difference for buyers who are already struggling with high prices.

Speaking of prices, the New Zealand housing market has been experiencing downward pressure in some areas of the country. Auckland, in particular, has seen prices fall slightly over the past year. According to data from the Real Estate Institute of New Zealand (REINZ), the median house price in Auckland fell by 2.2% in September 2023, compared to the same period in the previous year. While this may be good news for buyers, it has created challenges for sellers who are looking to make a profit on their property.

Another challenge for both buyers and sellers is the longer time it takes to sell a house. According to REINZ data, the median number of days it took to sell a house increased. This is partly due to the cooling of the market, which means that there are fewer buyers and more competition among sellers.

The combination of these trends means that the New Zealand housing market is becoming more challenging for both buyers and sellers. For buyers, the higher interest rates and lower prices may be good news, but the longer time it takes to find a property and the greater competition from other buyers can be a significant obstacle. For sellers, the pressure on prices and the longer time it takes to sell a property means that it may be more difficult to make a profit on their investment.

Looking ahead, it is difficult to predict exactly what will happen in the New Zealand housing market. However, it is likely that the current trends will continue, and that buyers and sellers will need to be prepared for a more challenging market. For buyers, this means being patient and doing their research to find the best deal, while for sellers, it means being realistic about their expectations and being prepared to wait longer to sell their property.

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