Market mood changes as real estate standoff emerges

House prices in Canterbury are still rising while those across Auckland and Wellington start to tumble – but the mood is changing and prices are likely to follow, experts say.

Christchurch has not seen the price drops recorded in more than 150 North Island suburbs in the three months to the end of February. In some part of Auckland values ​​fell more than five per cent.

But despite record prices, a buyer-seller standoff is emerging in Canterbury. Real estate agents say sellers are holding out for favorable prices, while buyers fear paying too much.

Abigail Dougherty / Stuff

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Real Estate Institute (REINZ) chief executive Jen Baird said fewer of the homes going to auction in the region were selling under the hammer, with buyers concerned that the market was easing while sellers’ expectations “remain high”.

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“Agents say that informing vendors of the shift in market sentiment is important,” she said, and that tougher mortgage lending rules had also made first home buyers in the city “cautious”.

REINZ chief executive Jen Baird says market sentiment has shifted.

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REINZ chief executive Jen Baird says market sentiment has shifted.

Kelvin Davidson, property economist for analyst CoreLogic, said wary buyers would contribute to slowing sales.

“There’s a buyer-seller standoff going on and sellers will not budge.

“The mood has changed. The market in 2022 will be very different to last year. ”

Christchurch property valuer Natalie Edwards, from Urban Edge Valuations, said the city’s housing market was “softening” as borrowing has become harder.

“I’m not expecting it to be significant. But it had to come. We’ve come off a voracious market, it’s almost been a hyper-market. ”

Christchurch prices rose 28 per cent during the booming market of the past year, setting a new record of $ 720,000 last month.

All Christchurch suburbs saw average home values ​​rise in February, mostly by between two and four per cent, according to CoreLogic.

Sales numbers were down. A quarter fewer homes sold in Christchurch during February compared to a year earlier, and sales took four days longer on average.

A home advertised for sale in Christchurch this week.

STACY SQUIRES / Stuff

A home advertised for sale in Christchurch this week.

Davidson said he expected Christchurch prices could fall five per cent.

While expensive markets such as Auckland were more volatile because buyers “had to stretch a bit”, Christchurch was steadier, he said.

Nationally, house prices could fall about 10 per cent, but the amounts would vary across the country, he suggested.

“It’s going to be a bit patchy. Christchurch price falls will be smaller because it’s starting from a position of affordability.

CoreLogic chief property economist Kelvin Davidson says there's a standoff between buyers and sellers.

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CoreLogic chief property economist Kelvin Davidson says there’s a standoff between buyers and sellers.

“Christchurch’s market will slow because, like everywhere else, mortgage rates are up and it’s harder to get finance.”

Davidson said he expected prices in the city would eventually stabilize and flatten, and affordability would “reset” during periods of inflation.

“There are forces pulling down prices. What we will see in the next five years is a flat period. ”

Edwards said she was seeing people downsizing from larger homes for something less expensive, and this would have a “trickle-down effect”.

Christchurch house prices are still setting records.

STACY SQUIRES / Stuff

Christchurch house prices are still setting records.

Investment units were a bit tougher to sell “off the plans” and there was less demand from North Island investors, she said.

“The gusto started going out of the market late last year. People are turning off property, and the last rise in interest rates was the latest blow. ”

The CoreLogic figures show that in most Christchurch suburbs, average values ​​rose between two per cent and four per cent in the three months to the end of February.

The biggest increases were in Kainga, Richmond Hill, Kennedy’s Bush, Addington and Bromley, all with rises of over five per cent in the three months.

The smallest increase was in the central city, followed by Northcote, Waimairi, Ilam and Heathcote Valley, all with rises of about one per cent in the period.

The priciest suburb remains Fendalton (median value $ 1.62 million), followed by Kennedy’s Bush ($ 1.61m), Scarborough Hill ($ 1.58m), Merivale ($ 1.38m) and Richmond Hill ($ 1.36m).

Cheapest is Phillipstown ($ 428,200), followed by Aranui ($ 441,800), Linwood ($ 481,000), Wainoni ($ 490,000) and Kainga ($ 491,000).

Phillipstown has Christchurch's lowest average home value.

CHRIS SKELTON / Stuff

Phillipstown has Christchurch’s lowest average home value.

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