House sales pick up beyond usual spring surge - but prices are still flat

Tuesday, 18 November 2025

A strong lift in house sales in October is 'tentative evidence” of increasing demand, but house prices are still flatlining, economists say.

The Real Estate Institute’s latest data was out on Monday, and it showed there were 7505 sales nationwide last month, up by 6.4% from 7053 at the same time last year and by 3.6% from September.

Local agents had been commenting on the growing positivity and activity they had observed at a regional level, the institute reported.

Westpac senior economist Michael Gordon said the market was “perkier” in October, with sales picking up compared with previous months, even after allowing for the usual spring surge.

Once seasonally adjusted, there was a 5.5% rise in sales, and as they were typically understated on the first release, the final result was likely to be revised to a 7% to 8% rise, he said.

“That would put them back to around the levels that we saw in May this year, and not far from the three-year high that we saw in April.”

But sales were still running somewhat behind the pace of new listings, with the result that the stock of unsold homes on the market has picked up further in recent months, he said.

“Consequently, there is little sign of upward pressure on sale prices at the moment.

“The house price index was down 0.1% in October, after flat readings in August and September. That is a relative improvement on the renewed decline in prices that we saw mid-year.”

Gordon said the Reserve Bank’s recent cut to its benchmark official cash rate had pushed down mortgage rates in recent months.

Against that, the market remained adequately supplied due to reasonable levels of construction activity and the slow pace of population growth, he said.

“We expect only a modest lift in prices over the next few months, picking up to a rise of around 5% over 2026 on the back of an improving economy, higher net migration and a reduction in the backlog of unsold homes.”

For ANZ senior economist Matthew Galt, there had not been any decisive change in the direction of the market in October.

The rise in sales volumes meant they were now above their long-run historical average for this time of year, he said.

“Prices remained flat in Auckland, fell in Wellington, and were mixed around the rest of the country.”

But higher sales volumes provided some “tentative evidence of stronger demand”, he said.

“We expect lower interest rates and a recovering economy to gradually support the housing market and see prices rising by 5% in 2026.”

ASB senior economist Jane Turner said the lift in sales in October recovered much of the dip in demand seen since July.

“The lift is particularly encouraging as it matches other high frequency data suggesting the slowdown in household demand seen over the September quarter was temporary.”

While demand has improved, aided by the decline in mortgage rates over the past year, the supply of housing remained the dominant dynamic in the market, she said

“New listings have increased heading into spring, and the total number of houses available for sale continues to rise.

“The supply of new houses available for sale remains high and outpacing the lift in housing demand. House buyers can afford to remain picky for now.”

Prices were trending sideways, and while market supply remained strong any improvement in prices was likely to be limited, she said.

“In 2026 an improving labour market may help with additional recovery in housing activity. However, subdued population growth and an overhang of housing supply may limit the extent of price growth.”

Infometrics economist Matthew Allman agreed the number of new listings was keeping a lid on the market.

Annual sales volumes in October were at their highest since the year to March 2022, but the stock of properties for sale rose 1.9% from September, increasing for the third consecutive month, he said.

“The number of new listings rose 5.4% from September to the highest monthly total since December 2024, and the number of properties available for sale remains at a more than 10-year high.

“Time to sell has lacked any real trend in 2025, with the surplus of stock available for sale driving a lack of buyer competition in the market and keeping the length of time to sell elevated.”