MNI BRIEF: NZ House Prices Post Biggest Fall in Three Decades

The Reserve Bank of New Zealand's aggressive rate hiking campaign continues to squeeze the country's real estate market, with house prices suffering their sharpest year-on-year decline since the 1990s according to October data from the Real Estate Institute of New Zealand.

REINZ's House Price Index fell 10.9% y/y, notching up the 14th consecutive month showing a year-on-year decline as market sentiment has cooled in the wake of the RBNZ's eight consecutive hikes that have tightened policy by a cumulative 325bp since the first hike in October 2021. The RBNZ is expected to consider a 75bp hike when it meets on November 23. (See MNI BRIEF: CPI Shock May Push 75bp Hike On To RBNZ Radar)

Median prices for residential property fell 7.5% annually, but increased 1.9% from September. New listings are down 4% annually, and the median number of days to sell a property in October was 44 - up 10 days compared to October 2021. However, properties were on the market three days fewer in October compared to September.