Confidence returning to the housing market slowly

Some parts of the country are showing an increase in sales while buyers and sellers in other parts continue to wait, the latest REINZ data show.

Thursday, June 15th 2023, 11:01AM

by Sally Lindsay

Seven regions increased has higher sales, an indicator of returning market confidence, says Jen Baird, REINZ chief executive.

And as interest rates stabilise and the easing of low-to-value restrictions, median house prices eased at a slower rate.

In May the median price dropped 8.2% year-on-year to $780,000 but there was no change month-on-month.

The median days to sell has risen to 49 – up six days compared to May last year, and up three 3 days from 46, when compared to April.

New Zealand, excluding Auckland, has a drop in the median price of 6.5% to $685,000 and a 2.1% decline month-on-month.

In the regions, Nelson had the biggest median price rise last month at 2.7% year-on-year and 6.9% month-on-month to $770,000. The West Coast had another increase with a month-on-month rise of 3.1%.

Two districts reached record median prices: Grey District with a 18.7% increase year-on-year ($400,000) and Waitomo District taking top spot with a 53.4% increase year-on-year ($655,000).

At the end of May, the total number of properties for sale across New Zealand was 26,685, up 250 properties (0.9%) year-on-year, and down 6.8% month-on-month. New Zealand, excluding Auckland, was also up from 15,799 to 17,015, an increase of 1,216 properties annually (+7.7%). Month-on-month, inventory dropped 7.3%.

The total number of properties sold across New Zealand last month was 5,752, down from 5,776 in May 2022 (-0.4%), and up 30% month-on-month. For New Zealand, excluding Auckland, sales counts increased by 1.4% year-on-year and 26.7% month-on-month.

Seven regions, Northland, Auckland, Waikato, Wellington, Tasman, Marlborough and Southland all had a 30% increase or more in sales volumes month-on-month, with Marlborough topping the list with 66.7% in sales.

Of those seven regions, it was only Marlborough, Tasman and Wellington that exceeded what would typically be expected in May based on the April sales counts.

Northland and Waikato had a slightly larger increase in sales count from last month than is typical whereas the Auckland and Southland month-on-month movements in sales count were less than what typically happens in those regions when moving from April to May.

“We’ve heard from salespeople that most sellers are meeting the market while others are potentially holding tight on selling at a higher sale price, particularly if they had bought in the peak of the market,” Baird says.

“These tend to be the properties that stay on the market longer. Easing of loan-to-value restrictions, commentary around peak inflation and a renewed confidence are seeing more first home buyers seek out opportunities.”

Nationally, new listings dropped by 18.1%, from 8,983 listings in May last year to 7,359 listings in the same month this year. Compared to April 3, listings rose by 3% from 7,142. For New Zealand, excluding Auckland, listings declined 17.4% year-on-year from 5,801 to 4,792. Auckland’s listings were down 19.3% from 3,182 to 2,567 year-on-year, but up 2% on April.

The REINZ House Price Index (HPI) for New Zealand which measures the changing value of residential property nationwide showed an annual drop of -11.2% for New Zealand and a -10% decrease for New Zealand, excluding Auckland.

Tags: REINZ