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New Zealand: The once-Hottest Housing Market in The World is cooling down rapidly



Homeowners are taking a long time to sell home in the context of soaring borrowing costs affecting demand. The fact that central banks around the world simultaneously raised interest rates sharply has caused a gloomy situation for the world’s real estate market and New Zealand is also one of the countries most affected.  According to property auction website Trade Me, the supply of homes for sale in the Australian nations has increased by 43% compared with the same period last year, accordingly home prices continued to be pushed down.

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Homeowners are taking a long time to sell home in the context of soaring borrowing costs affecting demand. The fact that central banks around the world simultaneously raised interest rates sharply has caused a gloomy situation for the world’s real estate market and New Zealand is also one of the countries most affected.  According to property auction website Trade Me, the supply of homes for sale in the Australian nations has increased by 43% compared with the same period last year, accordingly home prices continued to be pushed down.

New Zealand: The once-Hottest Housing Market in The World is cooling down rapidly

Newly released data on residential real estate prices in October of this site show that the average asking price for a home in Auckland has fallen by 3.4% compared to the same month last year.  This comes as average real estate prices across the country fell 7.5% in October compared with 2021, according to the Real Estate Institute of New Zealand (REINZ).

Meanwhile, this decline is not expected to show any signs of improvement, as the Bank of New Zealand is likely to continue its year-long tightening cycle at the end of this month and raise interest rates by 75 basis points to 4.25% to curb inflation.

As a result, sellers are having to find strange ways to advertise their homes, for example one of them offered to give the new homeowner a Tesla car for free. This Tesla is purely a gift, not an asset to push home prices higher.  Currently, Tesla cars in New Zealand are sold for about 72,400 USD.  This seven-bedroom property is attractive, but it's close to more than 400 other homes which are also for sale and many of which can take months to find new homeowners.

According to REINZ, home sales now take an average of 47 days, up from 37 days a year ago and 28 days in early 2021.

In the second quarter, New Zealand home sales fell below 16,000 - The worst quarter since 2010, according to CoreLogic New Zealand data.  Home prices are also down 12.6% from their November 2021 peak, and economists  predict that this decline isn't over yet.

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Although home prices are and will continue to fall, homebuyers are waiting for an opportunity before deciding to buy because they are still struggling with tight borrowing conditions and higher borrowing costs.

New Zealand: The once-Hottest Housing Market in The World is cooling down rapidly

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