New Zealand's housing market is experiencing a major crisis in the real estate market. This is caused by a drop in demand for housing and a huge drop in prices. Global Property Guide shares the analytics. 

In 2022, average New Zealand home prices fell 18.13% (adjusted for inflation) from a year earlier. This is all the more surprising when you consider that, in 2021, there was a 14.02 percent increase in residential property prices. 

In 2023, prices continue to fall—in January, New Zealand home sales fell 27% year-over-year (to 2,759 units). This is data from the Real Estate Institute of New Zealand (REINZ). This situation is affected by many factors: rising interest rates, high inflation, recent changes to the Credit Contracts and Consumer Financing Act (CCCFA) lending rules, and global economic and geopolitical uncertainty.

The regions with the strongest January 2023 sales declines were Taranaki (-37.3%), The Bay of Plenty (-37%), Northland (-36.3%), Waikato (-32.3%), and Gisborne (-31.8%). Auckland (-29.9%) and Southland (-29%).

And it's not just demand that's declining but supply as well. In January 2023, there were 16% fewer new home listings compared to the previous year (down to 6,646 units). And housing is also sold quite slowly: during the same period, the average number of days to sell a property was 53, which is 16 days more than in January 2022.

The price situation for buying and renting in New Zealand cities is as follows (2-bedroom apartments in city centers): 

  • Auckland: the purchase price is $421,114; the rent price is $1,259 per month. 
  • Wellington: the purchase price is $385,131; the rent price is $1,417 per month. 
  • Dunedin: the purchase price is $278,663; the rent price is $1,003 per month. 
  • Christchurch: the purchase price is $356,131; the rent price is $1,081 per month. 

As for New Zealand's economy as a whole, its success in 2022 was very modest, with the economy growing by 2.3% in 2022, up from 5.6% in 2021. The International Monetary Fund predicts that New Zealand's economy will grow by only 1.9% in 2023.

In order to combat inflation, the Reserve Bank of New Zealand has raised the official cash rate (OCR) ten times since October 2021. The rate now stands at 4.75%, the highest level in 15 years.