Record number of real estate agents say house prices are going down

A new real estate survey has revealed a record number of agents are seeing a decline in house prices in their location.

The Real Estate Institute of New Zealand (REINZ) and Tony Alexander Real Estate Survey released on Monday gathers the views of licensed real estate agents across the country on residential property market conditions at the moment. They’re asked how activity levels are changing, what the views of first-home buyers and investors are, and the factors that are affecting the sentiment of those two large groups.

Out of the 468 respondents, a record net 44 percent of agents said that prices are declining in their location. Just 6 percent reported that prices are rising, 50 percent said they are falling, and 45 percent said they are not changing.

The survey shows that agents feel prices are falling in all locations except Queenstown.

This decline in house prices is in stark contrast to what was seen between August 2020 and February 2021, where over 80 percent of agents regularly reported that prices were rising in their location. This was a “substantial turnaround” from the net 17 percent who in April 2020 at the start of lockdown said that prices were falling.

The survey respondents also revealed that fear of missing out – or FOMO – is no more and just 7 percent said they saw buyers displaying this.

No agents reported seeing any FOMO in Hawke’s Bay, Manawatu-Wanganui, Wellington, and Dunedin. A gross 18 percent in Queenstown, however, reported some FOMO, the survey says.

“Widespread reports of weakening sales, falling prices, and inability to get credit likely account for buyers no longer feeling a visceral need to buy as soon as possible,” the report says.

Additionally, a record 71 percent of agents said they’re seeing fewer first-home buyers in the market.