Biggest city reports biggest price drop as turnover dries up around the country

Friday, 13 September 2019

What's happening in the crazy world of New Zealand's fluctuating house prices?

A slump in residential property sales volumes is being blamed on sellers being hesitant about taking their properties to market.

The Real Estate Institute has released its latest data, which shows house sales were down 6.1 per cent in August compared to the same time a year earlier.

It was the lowest level of sales in seven months.

Southland had the biggest decline. There, the number of sales was down 33.2 per cent.

* High sales, low prices: Signs of oversupply in Auckland property market?**

Chief executive Bindi Norwell said the sales slump was a surprise considering July had shown signs of improvement.

'However, an extremely wet August across most parts of the country and the past three months having the lowest number of new listings of any consecutive three months since records began in 2007 look to have been contributing factors.'

In Auckland, the median price slumped 3.5 per cent to $820,000.

She said there were 3624 fewer new listings in August compared to August 2018.

'With limited choice in many parts of the country in terms of new listings, we're hearing from a number of agents that people are waiting to purchase before they put their own property on the market, which is slowing the whole market down. Hopefully as confidence starts to improve over the coming months, we'll start to see this flow through to new listings which leads to more choice for buyers.'

Median prices increased nationwide by 5.5 per cent to $580,000. Excluding Auckland, the country's median price hit a record $498,000, up 9.5 per cent.

But in Auckland, the median price slumped 3.5 per cent to $820,000.

Norwell said that could be attributed to a drop in sales of properties for more than $1 million.

Median prices fell more than 10 per cent in Manukau City to a level not seen in 19 months.

But elsewhere in the country, prices were holding firm.

'Southland, Manawatu/Wanganui and Hawke's Bay all achieved record median prices during August reflecting the strong median price growth for a number of months now. This price growth shows no sign of slowing down – especially as there is limited stock for buyers to choose from,' Norwell said.

'Northland also saw a record median price in August, and this was influenced by particularly strong growth in the Whangarei District where prices increased 12.4 per cent annually to $515,000.'

ASB economists said the data confirmed their view that the housing market was improving.

'We still expect house price inflation to build to a 5 per cent to 6 per cent annual pace by mid-2020 as sharp falls in mortgage interest rates help thaw out the Auckland housing market and add a little more heat to simmering regional markets. Spring will a key test of this view. We find that declines in mortgage rates tend to take six months or so to impact house prices.'