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Gisborne median house price hits all-time high

Gisborne house prices finished 2021 on an all-time record median high of $695,000.

Latest data from the Real Estate Institute of New Zealand show the region's median price rose by $105,000 between December 2020 and the end of last month, $285,000 up on the same time two years ago and $411,000 from five years ago.

The median price trend has been increasing strongly over the past few years but might be showing early signs of a decelerating rate of increase, REINZ regional director Neville Falconer said.

“Listings were down notably in December, with a 34.9 percent decrease year-on-year, showing that many sellers are waiting to list in the new year when more people are around. The median number of days properties are spending on the market increased by five, largely due to lending criteria changes taking effect — a contributing factor to the decline in buyer numbers compared with previous months.

“Days to sell may increase further due to the new finance criteria which will begin to affect the price sellers receive if they find themselves under pressure and unable to hold out for a premium price.”

Property Brokers Gisborne branch manager Stefan McNeely said the figures showed prices were still “gradually going up” but new lending regulations could throw a “shadow” over the coming year.

“I know of a couple of mortgage brokers who have pulled the pin on their business just because they are not getting in the queue. Lending is taking a lot longer for people to get approval and mortgage brokers are not getting to the front of the line as people are dealing directly with banks.

“It's going to be an interesting year, that's for sure, and I think there are going to be some great opportunities for both sellers and buyers.”

Bayleys Gisborne director Simon Bousfield said tighter lending restrictions had not yet had an impact.

“There's still enough demand in the market and with lower stock levels than this time last year and in previous months that has continued to drive those values. We've been through a period of people capitalising on high values. That's starting to now come off the other side.

‘We don't have an endless supply of houses so that was always going to happen.”

Mr Bousfield said there was still “huge” outsider demand, with just under half of buyers from outside the region.

Those buyers, combined with the amount of auction sales conducted in the region, combined to drive values.

Gisborne was among 19 of the 67 territorial authorities to hit median price records in December — the lowest number since July 2021,” REINZ chief executive Jen Baird said.

“December was a solid close to a strong year for the New Zealand property market.

“House prices were considerably higher than December 2020, demand and sales activity remained firm and there was a welcome increase in new listings through November and into December.

“Across New Zealand, there was an annual increase of 21.5 percent in the median price, reaching $905,000 — down 1.6 percent compared to November 2021,” Ms Baird said.

“New Zealand, excluding Auckland, saw a yearly increase of 20.6 percent to $760,000 — a 1.3 percent decrease compared to the month prior.

“When we consider the seasonally adjusted median prices, which assesses a month's performance outside of predictable seasonal patterns, December price movements were as expected.

“However, we are noting signs of deceleration in annual price growth compared to previous months,” Ms Baird said.

“While the market remains confident, the impact of rising interest rates, tighter lending criteria and changes to investor taxation restrictions are starting to shift dynamics.

“In particular, the amendment to the Credit Contract and Consumer Finance Act on December 1, 2021 — which requires stricter scrutiny of borrowers' financial health — seems to have had an immediate effect.

“Feedback from several regions notes a fall-off in buyer numbers, particularly first-time buyers, as a result.”

  1. Perry anderson says:

    Yes investors have thrashed the housing market and the Government acted too slow to shut them out, but with inflation cranking and interest rates rising and the sharemarket ready to pop, the housing market will do a u-turn and first-home buyers will get their chance.