Previously buoyant areas of the country have suffered the worst but the strength of the labour market should limit the risk of mortgagee sales for many. Photo / George Heard, File
From RNZ
The downturn in the property market is deeper than anticipated, with a bigger drop in values and sales volumes likely to persist into 2023.
CoreLogic NZ’s annual Best of the Best Report confirmed 2022 was a buyer’s market, with the negative outlook rising in line with mortgage interest rates.
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CoreLogic chief property economist Kelvin Davidson said the introduction of tighter lending regulations, loan-to-value ratio rules, higher mortgage rates and more listings combined to tilt the balance of power away from sellers.
“Our outlook proved to be correct, but we, and many others, underestimated how deep the downturn in sales volumes would become and also how far house prices would fall.
“It’s been striking just how weak sales activity has been this year, as buyers have taken their time to decide about purchases and vendors have also been able to ‘sit tight’ too – assisted by low unemployment.”
CoreLogic chief economist Kelvin Davidson. Photo / Peter Meecham, File
For the 2022 calendar year, total sales volumes were estimated to be about 67,000, which was the lowest since 2010, and the third lowest figure in the past three decades, with next year’s volumes expected to be little changed.
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Davidson said national average values were already down about 10 per cent from the peak, with the potential for another 10 per cent drop in 2023.
“For context, the GFC [Global Financial Crisis] saw a final peak to trough fall of 10 per cent.
“If this does eventuate, it’s important to remember prices will still be 15-to-20 per cent above pre-Covid levels.”
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