Where Housing Prices Have Crashed and Billions in Wealth Have Vanished

In New Zealand, high interest rates have sent property prices sliding nearly 18 percent since November 2021.

A row of brick townhouses with gable roofs.
New townhouses in Auckland, New Zealand. Because of soaring interest rates in the country, houses for sale now sit on the market for an average of 47 days, with some languishing for many months.Credit…Ruth McDowall for The New York Times

Natasha Frost, who is based in Melbourne, Australia, reported from Auckland and Christchurch, New Zealand.

Michael Wilson was hopeful when he put his three-bedroom house up for sale: Over a dozen would-be buyers came to the initial showing.

But about a year later, the property is still for sale. Offer after offer fell through because the prospective buyers were unable to sell their homes.

Welcome to New Zealand, one of the world’s most troubled housing markets. Over the last 18 months, homeowners and investors have lost billions of dollars in wealth after prices that spiked during the Covid pandemic started plunging as mortgage rates also soared.

“If we listed it, say, two months before we originally did, it would have literally sold the next day,” Mr. Wilson said. He and his wife, Jade, might finally have found a buyer for their three-bedroom house in Te Awamutu, a pretty North Island town of 13,000 people. But if they are lucky they will be paid about 15 percent less than they originally sought.

The pandemic’s disruptions to jobs, wages and living conditions caused a yo-yo effect in housing markets in many countries, including SwedenBritain, Canada and Australia. Few places have experienced as wild a swing as New Zealand, which last week slipped into a recession.

Source/ Read More :The New York Times