During December and January, sales plummeted 33% to 82 and 87 sales respectively as the Napier housing market showed signs of slowing. This was partly due to the holiday season, but more significantly as the Reserve Bank’s prudential policies started to have their desired effect.
These restrictions are two-fold: investors across the country now need a 40% deposit and new lending to low-deposit customers must not exceed 10% of the bank’s new lending portfolio. This intentionally tough environment has resulted in an easing in the level of demand from potential buyers (measured by banks running online valuations on their behalf); and a fall in the number of new listings coming onto the market.
Questions remain about how long the moderation will last.
Demand in some sectors (particularly between $300,000 and $500,000) continues to be constrained by insufficient stock, and this pressure has pushed prices upward. Quotable Value is reporting that on average prices in Napier are 20% higher than during the same period last year.
The median days to sell remains low. If a property does not sell within 3 to 4 weeks it is usually an indication of a discrepancy between the value offered and the pricing strategy.
As we move into the new year, many people appear to be waiting to assess the situation before making a move.
Napier: Number of Properties Sold (REINZ)
Napier: Median Price (REINZ)
Napier: Selling Price Distribution (REINZ)