House sales down 34.7pc, prices continue to fall: latest Real Estate Institute data

Walk on by: volumes and prices are continuing to fall. Photo / Supplied

October’s national house sales volume was 34.7 per cent down on last year from 7486 to 4892 and prices are continuing to fall.

The national median price fell 7.5 per cent annually from $892,000 to $825,000, and Auckland’s is down 13 per cent from $1,249,000 to $1,090,000.

New Zealand had 26,577 properties for sale at the end of October, up 75 per cent from 15,217 properties a year ago, with Auckland having 10,340 properties for sale.

Excluding Auckland, there were 16,237 properties on the market nationally, up 88.5 per cent from only 8614 properties for sale a year ago.

Jen Baird, Real Estate Institute chief executive, said at this time a year ago, Auckland was in a 108-day lockdown that didn’t end till December but despite that, people began to become somewhat cheerier and that was reflected in data.

“In October 2021, increased optimism over the easing of lockdown restrictions in Auckland, combined with a delay to the introduction of changes to the Credit Contracts and Consumer Finance Act from October to December, impacted market activity,” she said.

Last October, there had been a sense of urgency, reflected in the property data.

“On an annual comparison, we’re comparing to a period of heightened activity,” she said of last October.

That same sense of urgency and need to trade did not dominate last month.

“This year, several compounding factors have created uncertainty and hesitancy in the market where there was confidence and urgency last year: rising interest rates and the cost of living, tax legislation and property regulation, tightened lending criteria, and global events with macro-economic impacts.”

Buyers and sellers are acting with caution, Baird said

Annual inflation has hit 7.2 per cent and the Reserve Bank has increased the official cash rate and is expected to increase it again with more increases in 2023. This means mortgage rates are yet to peak, and some banks are already increasing their fixed mortgage rates, Baird said.

The REINZ House Price Index, which measures the changing value of residential property nationally, fell 10.9 per cent annually but has dropped 12.4 per cent from its peak last November.

It now takes a median 44 days to sell a New Zealand residential property, 10 more days than last October. In Auckland, it takes n median 43 days to sell.

The Auckland region has recorded six consecutive months of annual median price decreases for the first time from August 2008 to January 2009. All seven Auckland districts had negative annual median price movements; North Shore had the greatest decrease down 18.2 per cent, followed by Papakura, down 17.3 per cent.

In Wellington, the median price fell 17.2 per cent annually, from $1m to $828,000. Wellington has recorded five consecutive months of year-on-year median price decreases. That is the first time since May to September 2011. All eight areas there had negative annual median price movements, with South Wairarapa seeing the greatest decrease, down 33.7 per cent, followed by Carterton, down 26.5 per cent.

Yet some areas continue to buck the trend.

Marlborough District hit a median price record of $781,000, and Invercargill city reached a record $485,000.

Areas with the biggest annual sales volumes drops were Tasman, down 45 per cent annually from 80 to 44 sales in October, Auckland - down 42.2 per cent from 2688 to 1554 - Southland, down 41 per cent from 149 to 88 sales, and Northland down 39 per cent from 184 to 112 last month.

The Bay of Plenty’s median sales price dropped 4.4 per cent annually to $860,000. Northland’s rose by 3 per cent to $720,000. Waikato’s is down 0.2 per cent to $800,000 and Taranaki’s is down nearly 5 per cent to $600,000.

Canterbury’s median price fell 1 per cent annually to $659,999 and Otago’s 10.5 per cent to $680,000.

The Queenstown Lakes District continues at a $1,240,000 median, up from last October’s $1.3m and up on September’s $1,216,000.

Gail Hudson, REINZ regional director in that area, said: “Salespeople report an increase in interest from prospective buyers outside of the region, particularly from the bigger cities. There was also some inquiry from Australia, with holidaymakers viewing properties when in the region with the intention of buying. The most significant impact on the Queenstown-Lakes District market is rising interest rates which is causing hesitancy amongst buyers and concern amongst vendors that the value of their property will decline.”

The Australian this week reported more interest in Queenstown from across the Tasman. An article yesterday was headlined ‘No stamp duty, falling prices: why Australian buyers are looking across the Tasman to New Zealand.’

Factors were providing opportunities to the only foreigners allowed to buy houses here: Australians and Singaporeans.

The Australian noted that last decade, our Government tightened controls on foreigners buying, particularly cashed-up Americans and mainland Chinese, to hose down rising prices. The article quoted Ray White Remuera agent Steve Koerber and Nick Horton of Luxury Real Estate New Zealand.