As house values record their biggest fall in 14 years and real estate agents see sales decrease, experts explain how the power is returning to buyers. Video / NZ Herald
The election is not firing any recovery in our depressed house sales market despite hopes the October 14 event, prices dropping and people wanting to get in quick might ramp up activity.
According to today’s Real Estate Institute data, national median house sale prices dropped 1.3 per cent from Juneto July, reaching $770,000 by the end of last month.
Auckland prices fell a further 1 per cent to $990,000 between the two mid-winter months.
But volumes were hardest hit, down 15 per cent nationally from June to July. Last month, only 4903 places were sold in this country.
Auckland volumes fell 15.4 per cent to just 1645 sales.
Taking a step back, prices are now well below where they were in July last year. The national median price has dropped 4.9 per cent annually from $810,000 to $770,000.
For New Zealand excluding Auckland, median prices decreased 5.4 per cent from $719,000 to $680,000 annually.
The total number of properties for sale nationally dropped 12.4 per cent annually and down 6.4 per cent from June to July.
All regions had a decrease in listings since July 2023 except for Marlborough, a notable exception with a 12.5 per cent increase in listings. Six of 15 regions have had listings decrease by more than 20 per cent year-on-year.
Baird said listings were continuing to fall.
“These listing decreases are similar to last month’s so although our salespeople are reporting further increases in activity across the country the looming election and ongoing tighter economic conditions are seeing sellers holding back,” she said.
Baird blamed a combination of factors.
“The ongoing impact of Government policies, economic conditions, and global factors will continue to shape the New Zealand housing market. We also tend to see a slowing in activity in the lead-up to a general election, but with buyer activity rising and lower levels of supply coming to market, we may see stronger demand appear in the coming months.”
The house price index stood at 3551 in July, showing a 0.7 per cent increase compared to the previous month. However, when compared to the same period last year, the HPI reflects a 6.9 per cent decline.
Today, ASB said in reaction to the REINZ data: “With high levels of net migration cooling and interest rate settings still extremely restrictive, we expect house prices to continue on this trajectory for some time.”
Satish Ranchhod, Westpac senior economist, said: “The July update from REINZ reinforced our view that the housing market has found a base, but it is not roaring away.” He expects the housing market to heat up again next year, with prices to rise by close to 8 per cent before next December.
“Underpinning that acceleration is the turnaround in net migration and expectations that interest rates are close to a peak,” Ranchhod said.
Westpac and ANZ then announced changes to their standard and special fixed home loan rates, following moves by ASB and Kiwibank earlier this week.
Westpac’s two-year fixed standard and special rate will increase 20 basis points to 7.39 per cent and 6.79 per cent respectively, effective from tomorrow.
The bank’s standard three-year fixed rate will also rise 20bp to 7.09 per cent, while the four-year rate will be bumped 10bp to 6.89 per cent.
Mortgage arrears in May rose to 1.32 per cent of the active population, up from 1.27 per cent in April, to the highest level reported since March 2020. However, back then home loan arrears were at 1.49 per cent and reached as high as 1.55 per cent in March 2017.
