New Zealand house sales slump 11 per cent

Tuesday, 14 May 2019

First home buyers are buying up property in the Hutt Valley and Porirua.

Last month saw the lowest number of property sales for the month of April in five years.

There was an 11 per cent drop in property sales across the country, and a 16 per cent drop in the number of sales in Auckland.

New Zealand's largest city is also facing a 'Groundhog Day' situation, with Auckland's median price remaining stuck at $850,000, Real Institute of New Zealand's Bindi Norwell said.

The number of house sales has fallen 11 per cent.

However, April figures show 6.4 per cent growth in New Zealand's median house price.

* Invercargill house values see growth spurt**

Sellers need to understand the current state of the real estate market, Norwell said.

Real Estate Institute chief executive Bindi Norwell says sellers need to adjust expectations.

'With sales volumes down in 13 out of 16 regions, we're still hearing anecdotes from real estate agents around the country that vendors need to really understand the market they're selling in and understand the gap between what they want to achieve for their property and what buyers are willing to pay.

'While median prices might be strong in a region, this doesn't mean that all properties are going to be at that level, so some research into comparable properties selling in your neighbourhood goes a long way.'

Norwell said the decline in sales figures weren't entirely surprising considering the overlap of school holidays, Easter and Anzac Day.

The number of listings on realestate.co.nz in April were also down 9.6 per cent, and spokesperson Vanessa Taylor said the drop was most noticeable in the urban centres.

'Most noticeably, it was the major regions of Auckland, Wellington and Canterbury which were well down on new listings in April compared to the same time last year,' Taylor said.

The number of properties listed for more than $1 million had also decreased year on year from 918 to 811, Reinz said.

Auckland's city centre had seen some of the biggest decreases, with a median fall 31.2 per cent in suburbs like Mt Albert.

While the Auckland market has stagnated, buyers could still expect to pay significantly more than the rest of the country.

Outside of the city, New Zealand's median price in April was $495,000. This was up from $460,000 in April last year.

Southland saw a record increase in the average price of property, a 22 per cent jump to $300,000 from $245,000 at the same time last year.

Nelson and Otago were the only regions to see a decrease in house prices, however both were less than a percentage point.

The number of days it took to sell was also an important measure of the market, Norwell said.

In April, the median number of days to sell a property increased one day from 36 to 37.

In Auckland, the number of days to sell increased four days from 37 to 41.

ANZ senior economist Miles Workman said there was no single reason for the lacklustre performance of the housing market.

'The thing with the housing market at present is there are so many drivers that are policy related,' Workman said.

'We have the uncertainty that was related to capital gains tax, though that has been removed, there is the unknown effect of the ban on foreign buyers and the impact of the bright-line policy which is essentially a capital gains tax if you sell within the first five years.

'Beyond that, you also have a slowing net migration cycle and dropping interest rates.'

Lender and investor weariness were weighing on the housing market, Workman said, but falls in fixed market rates and the exclusion of the capital gains tax could help to stabilise the market.