Housing market 'past the lowest point of the cycle'

Tuesday, 16 April 2024

The national median sale price increased to $800,000 in March, according to the Real Estate Institute.

House prices and sales continue to track upwards, but there is a flood of new properties coming on to the market, the Real Estate Institute says.

The national median sale price increased by 2.7% annually to $800,000 in March, and it was also up 1.1% from February, according to the institute’s latest figures.

Nine of the 16 regions had annual price increases, and Wellington led the way with the region’s average up 9.3% to $820,000.

Prices also climbed strongly in the country’s largest market, Auckland, where the regional average was up 5% annually to $1.05 million,

Hawke’s Bay, Nelson and Otago had annual price increases of more than 5%, while in Canterbury prices were up 1.9% to an average of $693,000, and in Christchurch they rose 3% to $701,500.

Real Estate Institute chief executive Jen Baird said it was the second consecutive month that there had been an annual increase in the median price nationally.

“This, along with increased year-on-year levels of sales and listings suggests that we are past the lowest point of this market cycle.”

There were 6521 sales nationwide in March, the Real Estate Institute says.

There were 6521 sales nationwide in March, up 8% from 6040 at the same time last year and up 7.4% from 6073 in February.

Sales increased annually in 13 of 16 regions, and in seven regions sales counts were up by more than 10%. In Auckland and Wellington sales were up by 5% and 17.2% respectively.

At the same time, listings were up 23.9% annually to 11,455 in March, and five regions, including Auckland and Wellington had listings increases of over 25%.

Baird said it reinforced the trend that began at the start of the year of more property being put on the market.

It left the number of homes for sale nationwide at 33,245 in March, which was the highest level since 2015, she said.

“There are more available properties for sale and more choices for buyers. Agents are seeing activity among a range of buyer groups, with first-home buyers and owner occupiers being the most active.”

But the institute’s figures also suggested that while market activity had improved, it remained relatively subdued.

Real estate market activity has returned to a more normal level, the Real Estate Institute’s Jen Baird says.

Once seasonally adjusted the national sales count was down 0.5% on a monthly basis, while Auckland’s was down 11.8%.

The institute’s house price index, which smooths out variations that come from sales figures, was down 1.2% from February, but up 2.6% on the same time last year. It was 14.5% below the 2021 market peak.

Baird said the data paints a picture of the market being more active, characterised by increasing listings, solid sales activity, expanding stock levels, and lifts in prices.

The summer had seen a return to a more normal level of real estate market activity after a relatively slow and subdued 2023, she said.

“The current economic environment with higher interest rates and some uncertainty in the jobs market will mean some buyers remain cautious, with prices still off their peaks from a couple of years ago.

“However, growing numbers of buyers are acting now. Most agents are cautiously optimistic that market activity will continue to pick up as we move into the cooler months.”

Some buyers might want to get in ahead of potential lifts in sale prices or increased competition for properties, as investor tax policy changes were expected to draw some investors back to the market, she said.