Property market ends 2018 with a fizz as sales plummet

Thursday, 17 January 2019

If you were trying to sell a house, last month was not the time to do it. And the situation was worst in Auckland.

Data from the Real Estate Institute shows the end of 2018 was a fizzer for the property market.

The number of houses sold across New Zealand dropped 13 per cent compared to December 2017, making it the quietest December in seven years.

In Auckland, sales dropped 24.3 per cent to the lowest December level for 10 years. It was also the lowest monthly sales volume of any month since October 2017.

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It now takes a median 35 days to sell a property nationwide, and 39 days in Auckland - the longest time recorded in any December month since 2001.

Real Estate Institute chief executive Bindi Norwell said December was usually quiet as people prepared for the Christmas holidays.

'December 2018 was extremely quiet … Additionally, 12 out of 16 regions saw an annual decrease in the number of properties sold.'

But she said some sellers were not helping the situation.

'With national listing levels down 11.3 per cent in November and 13.3 per cent in December, it's not entirely surprising that December was a quiet month in terms of sales volumes. However, what we're hearing is that part of the lower sales volumes can also be attributed to some vendors' understanding of the value of their home. A realistic approach to market value may help vendors sell their property in a more reasonable timeframe.'

Taranaki also had a big drop in sales, down 23 per cent. Wellington's were down 16.2 per cent.

West Coast and Tasman saw a lift in turnover, up 42.9 pr cent and 29.4 per cent respectively.

The national median house price increased 1.5 per cent year-on-year to $560,000 and in Auckland prices rose 0.2 per cent for the region as a whole to a median $862,000.

Within that, North Shore prices fell 11.6 per cent over the year, Franklin fell 4.2 per cent, central Auckland lifted 7.8 per cent and West Auckland had a 6.2 per cent increase. 

The house price index, which includes the values of houses that have not been sold recently, showed Auckland values dropped 1.7 per cent on the year before.

Excluding Auckland, values rose 8 per cent year-on-year.

Economist Brad Olsen, of Infometrics, said there was a two-track market in New Zealand. While the biggest city was slow and soft, the rest of New Zealand was still 'playing catch-up'.

He said Auckland buyers were probably listing at prices that were too high to sell and were not willing to drop back.

Government moves such as the extension of the bright line test, which taxes capital gains, and the foreign buyers ban, contributed to the Auckland slowdown, he said.

It was possible that adjustments to loan-to-value ratios, allowing more low-deposit lending, would boost activity and prices again over the coming months.