Key Facts

  • Monthly survey of real estate agents shows New Zealand back in a buyer’s market amidst new recession.
  • There’s been a decrease in people attending auctions and open homes, and a fear of overpaying is settling in.
  • Surge in listings and uncertainty around employment have reduced a buyer’s urgency.
  • The stock of property listed for sale nationwide has increased 21% since July last year.
  • Fears of job loss and reduced work hours are causing potential buyers to cut back on spending, potentially impacting the housing market.
  • The Reserve Bank will potentially cut interest rates from the middle of next year given the weakening housing market and deteriorating economy.

Article Summary

The recent survey held by Tony Alexander in partnership with NZHL has indicated a shift back to a buyer’s market in New Zealand due to the fears of a new recession, increased listings, and growing employment concerns. Real estate agents have reported a decrease in people attending auctions and open houses, with some citing a rising fear of overpaying for properties. This is a distinct shift from the seller’s market observed in September.

The Reserve Bank’s predicted recession and ensuing discussions, along with the speculation of interest rates rising by an additional 0.5%, have added to these concerns. There’s been a 21% increase in property listings since July of the previous year, which has decreased the urgency for potential buyers. Furthermore, employment anxieties have surged in the face of the recession’s potential impact, with more agents reporting potential buyers worried about job security and income stability.

These factors have further impacted customer spending patterns, with more people planning on reducing their spending due to fears of job loss and decreased working hours. This downturn in the housing market, coupled with the worsening economic scenario, could encourage the Reserve Bank to expedite its plan of cutting interest rates from mid of the next year. However, with inflation expectations and wage growth considered, any indication of ease from the Reserve Bank may not be expected until the second half of this year.

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