February traditionally sets a precedent in terms of how the year is likely to unfold. This year we have seen a reasonable month of activity with the working year back in full swing and perfect house buying weather. Sales volumes were down compared to 2022 but still a positive upward trend from January 2023.

January is traditionally a slower month as sellers and buyers are on holiday. This January was no exception with the least number of sales since records began, new listings decreased 16% year on year and stock is still remaining on the market longer compared to previous years. Many factors have come into play this year which has had an impact on buyer activity; the weather, the restrictions around borrowing, and this being election year.

Nationally, in 2022 we saw a lot of change in the housing market in response to rising inflation, interest rate hikes and shifting lending rules. While the Lower South has been more insulated to these changes than other parts of the country, it hasn’t been completely unaffected. Total available stock has steadily risen, even with the significant reduction in new listings across Otago and Southland.
With this, most markets are seeing the time it takes to sell a home increase, although in our region we have not seen the national trend of a significant drop in average asking price but more of an easing. Plenty of people are still looking to invest with reports of busy open homes and private viewings throughout the holiday season.

The Lower South property market continued to hold strong throughout November and into December with several areas reporting record sales and the average sale prices, although dropping from last years peak are still sitting above 2020 numbers. New listings coming to the market have definitely cooled and total housing stock remains high with days to sell higher than the 10 year average for November.
Owner-occupiers were still the most active buyer segment whereas investors have tapered off. Open home attendance has been light although, well-priced and well-marketed listings are still attracting good interest. As we move into the holiday period, there is plenty of opportunity for visitors to browse our great selection of quality property available for sale.

While many had anticipated the usual influx of listings to the market as Spring began, quite the opposite occurred. According to realestate.co.nz data, when compared to October 2021, new listings to the site were down nationally and in 14 of New Zealand’s 19 regions, including the entire lower south, with Queenstown-Lakes/Central Otago recording the biggest drop, down 35%.
This, in turn, has seen the average asking price holding and many are reporting that strong prices are being achieved. Whilst buyer interest has cooled from its peak in 2020 for the reasons that have been well covered in the media such as rising interest rates, the cost of living and inflation, the mid and upper end market across the region remains robust. Property is still remaining on the market longer as both buyers and sellers adapt to the changing landscape and expectations around value are aligned, this has led to higher levels of total inventory available for sale, despite the reduced level of new listings to market as mentioned above.

While changes have occurred in the confidence of buyers and sellers to transact real estate across New Zealand, the ability to borrow money has seen a continued lowering of barriers over the past month. Rising interest rates are still on the agenda of the Reserve Bank, as announced in their monetary statement last month. The market certainly has been different in the last two years. Today we sit in a more normalised market rather than the comparisons of 12 months ago. While prices still have a much higher value than two years ago, the normalisation of stock levels is closer. Buyer interest across the Lower South is seeing busy open homes with genuine buyers attending auctions; however, the numbers are less than they were this time last year. Vendors are now more aware of the challenges buyers face and are prepared to listen to the market. Stock is still remaining on the market much longer than the 10 year average but as we move into the summer months we expect this to decrease.

There has been plenty of commentary of late around the property market right across New Zealand. Since the latter part of 2020 the country had seen unprecedented levels of value growth over such a short period of time. Buyers entered the market with high levels of confidence due to record low interest rates and lower barriers to entry when it came to lending restrictions. Few are surprised that this period of growth could only be sustained for so long and more recently, we have seen the Official Cash Rate increase to its highest level in seven years and many banks are predicting at least two more rises of .5 percent over the next two reviews as the Reserve Bank of New Zealand grapples with continued inflationary pressures across the economy. That being said, purchasers are still able to borrow money at what are viewed as historically attractive rates and the real estate market across the lower south has proved to be more resilient than other parts of the country. In August, the sales count increased across 92% of the centres throughout the region underpinned by domestic migration, a buoyant employment market, supply pressures and in some areas values have played a catch up role to their neighbouring regions. While the time it has taken to sell a home on average has increased, this can be attributed to a more considered approach by purchasers being taken and sellers remaining firm on the value they are seeking.

The last couple of years have seen significant pressures in the housing market, today in many areas, we are experiencing a more balanced marketplace. While prices in most regions are still significantly higher than those pre-pandemic, the normalisation of inventory levels is starting to materialise and provide purchasers with more options to consider. While navigating the changes that have quickly occurred in recent times, the confidence of genuine buyers and sellers to transact real estate across New Zealand remains. More recently, the ability to borrow money has seen some lowering of barriers and this has seen the access to funding starting to ease. While the Reserve Bank of New Zealand recently raised the official cash rate by another 50 basis points to 3 percent - its highest level in seven years, most commentators are predicting that retail mortgage rates may be reaching their peak. There are several outcomes of this to consider on both sides of the transaction. Buyers could experience increased certainty around their repayment obligations over the coming period and sellers are able to bring their property to market with much more confidence around the level of demand.