According to the Real Estate Institute of New Zealand’s (REINZ) House Price Index, New Zealand house prices have declined nearly 13% from their November 2021 peak. Corelogic property economist, Kelvin Davidson, believes the Reserve Bank’s uber aggressive monetary tightening, which has lifted the official cash rate (OCR) to 4.25%, means that house prices and sales volumes will likely not bounce back until 2024. “It’s definitely a serious property downturn and more to come, for sure.”Davidson pointed out that there would only be 67,000 or 68,000 residential property sales this year, which is the lowest number since 2010. He pointed to ANZ’s forecast that New Zealand house prices would fall 18% peak-to-trough in nominal terms, and by 27% in real terms (i.e. Perhaps now FOHIR (fear of higher interest rates) will manifest in a sharper downturn than we all expect”, Workman said.

Source: Stuff November 28, 2022 04:25 UTC