Fewer property listings failed to stop slide in prices in 2023

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People who did not need to sell property in 2023, did not – but prices fell anyway.
Photo: RNZ / Nate McKinnon

A real estate industry expert is eyeing 2024 as a year of recovery for the property market after a year of correction.

House prices fell last year for the first time in a decade, with the average national asking price dipping below $900,000 according to property website realestate.co.nz.

The total value of homes listed last year showed a substantial $28.6 billion drop on 2022.

Chief executive Sarah Wood said while last year was the year of correction, the market is picking up.

“In the first 22 days of January we’re seeing a really healthy level of properties coming to market,” Wood said.

“That’s listings that we can see on our site. We’re seeing a shift in demand, with the number of people searching for property [on our site] up 8 to 10 percent, so that gives you a sense of the kind of interest and activity in the market.”

Realestate.co.nz data however showed a substantial drop of 22.8 percent from the $125,601,880,575 listed in 2023 on the previous year.

“It was clear that people who didn’t need to sell property in 2023, didn’t,” Wood said.

“Equally, falling price headlines likely made any opportunistic sellers pause in anticipation of better times to come.”

All of the website’s 19 regions had fewer new listings in 2023 than in 2022, while low supply did not translate to price increases in all but three regions.

“In a year of uncertainty around economic conditions, ongoing interest rate hikes, and a cost-of-living crisis, it’s not surprising that fewer Kiwis decided to put their homes up for sale last year.”

The data showed the robust Queenstown and Central Otago market continued to follow its own tune, hitting a record average asking price of nearly $1.6 million.

West Coast, Central Otago/Lakes and Marlborough were the only regions to see year-on-year average asking price growth in 2023.

West Coast had the largest year-on-year increase of 6.1 percent, but remained the only region below $500,000, with an average asking price of $467,361 for 2023.

Prices in Central Otago/Lakes had been trending upwards since the beginning of 2022, she said.

“Touted as one of the most naturally beautiful places in the world, property within Central Otago/Lakes seems exempt from market conditions as demand continues to soar.

“We know from buyer search data that a significant amount of interest comes from offshore.”

The regions to experience the biggest falls in asking prices in 2023 were Auckland (down by 9.5 percent), Wellington (9 percent), and Coromandel (6.8 percent).

“Coromandel’s spot within the top three could be down to the weather events, which effectively cut off parts of the region for several months during the year,” she said.