October property sales ‘light at the end of the tunnel’ - REINZ

Thursday, 14 November 2024

Westpac's Economic Overview suggests a brighter future for New Zealand, projecting over 2% growth in 2025. With mortgage rates falling, an 8% rise in house prices is anticipated as investors return to the property market.

Property sales and median prices ticked upward in October with falling interest rates and more property on the market creating more activity, according to new data.

Real Estate Institute of New Zealand (REINZ) data from last month showed the total number of properties sold nationally increased 20% last month on last October, with the biggest rises in Nelson (up 112.8%) and Marlborough (up 29.5%).

“There seems to be light at the end of the tunnel. Although challenges like the cost of living remain, positive signs are emerging,” chief executive Jen Baird said.

“Falling interest rates, increased inventory in the market, and greater activity during open home events are all reflected in the data for October,” Baird said, with last month’s property sales signalling a busier market leading up to Christmas.

The national median property price was up 0.7% on last October from $789,500 to $795,000, and up 1.9% on September from $780,000.

But Baird said interest rates were still high enough for buyers to be cautious about making an investment.

The Real Estate Institute of New Zealand chief executive officer Jen Baird.

“While median prices are gradually catching up, local salespeople note that some buyers remain cautious about overpaying for properties due to relatively high interest rates,” she said.

Regional median property prices were up at 10 out of 16 areas in the last year, with Marlborough leading the charge at a 18.3% increase to $769,000 on last year. The West Coast followed with a 14.7% rise on last October to $390,000.

New listings surge

REINZ found that new property listings surged last month following the trend of every other month this year, as 13 of 15 regions reported an increase in the number of listings compared to last year.

National property listings were up 21.4% to 11,572. Only Southland and Northland had no changes in property listings on last year. Regions with the highest rise were Gisborne with listings up 103.6%, Canterbury (up 40.6%) and the West Coast (up 40%).

REINZ data showed inventory levels were also on the up, lifting 26.3% on last October and 7.7% on September, coming in at 32,339 properties available for sale.

Meanwhile, New Zealand’s house price index (HPI) was down 1.1% on last year at 3,616, but was up 0.5% on September. The HPI average annual growth rate has been at about 4.8% but is currently 15.4% below its peak in 2021.