Asia Minute: New Zealand's housing market sees steepest tumble since the early 1980s
The Federal Reserve's decision to raise interest rates again will continue to play a role in housing sales— both here in Hawaiʻi and around the country. Across the Pacific, higher rates are already having a historic impact on the housing market.
The last time housing sales were this slow in New Zealand, the first mobile phones were about to go on the market, compact discs were new and Ronald Reagan was in his first term as U.S. president.
That was 1983 and the national pace of home sales had tumbled over the previous twelve months.
That's what happened in New Zealand in the year ending last month, resulting in the lowest 12-month sales total in 40 years, according to CoreLogic NZ.
But while first-time buyers and middle-class families are getting squeezed, it's another story for the very wealthy.
The percentage of purchases by cash buyers with multiple properties hit a new record last month at 15% of all home sales in New Zealand.
A report earlier this week from the Organization for Economic Cooperation and Development said New Zealand was one of the countries where housing prices have been hit hardest by rising interest rates.
The OECD says housing prices in New Zealand are down 14% since their recent peak compared to a decline of about 1% in the United States.
Part of the reason for that gap is that most homeowners in New Zealand have floating-rate mortgages— which fluctuate along with interest rates.