The median house price of $875,000 is down $50,000 from its peak in November.
ASB is expecting a 9% decline in national house prices over 2022 with falls continuing into the early part of 2023.
All told it’s about a 12% peak-to-trough decline, says Mike Jones, ASB’s senior economist. “For context, that would only take house prices back to where they were in early 2021, with prices still some 27% higher than the start of the pandemic.
In real (inflation-adjusted) terms – an increasingly relevant metric in the existing environment – Jones expect about a 20% correction, which will be the largest decline since the 1970s.
Adding to the expected fall, the 4,860 sales recorded by REINZ in April were 35% down on last year and well below the 30-year average for an April month of 6,500.
The median number of days to sell a property across the country (seasonally adjusted) is back up to the REINZ average of 39 days.
ASB says It took two years for the housing market to build up a fierce head of steam but only a few months for the pressure to be completely released. All housing market metrics are in full retreat.
Jones says it is the credit tightening that tipped the housing market scales, but things may soon ease up a little on this front. “However, the bulk of the house price impact from the mortgage rate surge is yet to come.” About 60% of all mortgages rates will be reset over the next 12 months. “Faster and larger lifts in mortgage rates have seen us trim our house price inflation forecasts.”
ASB says a house price inflation recovery should kick in over the second half of 2023, tied to its forecasts for an upturn in net migration and flattening mortgage rates.
Meanwhile, Kiwibank says housing data points to a market paying for last year’s excesses and it’s It’s also clear it is in for a rough ride over the year ahead.
The market is adjusting to the new reality of rising housing supply, investor-related tax changes, and far tighter credit conditions.
It expects the RBNZ to deliver another 50 basis points hike later this month on the way to lifting the cash rate to 3% by year end.
Kiwibank is predicting house prices to fall about 10% this year from a 5% drop previously forecast.
However, its forecast fall in house prices is expected to be short and sharp, with modest gains in house prices forecast by the end of 2023. Its view is based on the strength of the labour market and ongoing housing shortage underpinning the housing market.