Cotality data confirms NZ housing market still subdued, sales volumes fall again

New Zealand's housing market remained muted in the first three months of the year, according to Cotality. Photo / NZME

New Zealand’s housing market extended its subdued start to the year as sales volumes fell for the third consecutive month.

Cotality’s NZ Monthly Housing Chart Pack shows sales volumes in March were down 2.4% compared with the same time last year.

This follows year-on-year falls of 7.6% in January and 3.1% in February.

Cotality NZ chief property economist Kelvin Davidson said the persistence of weaker sales suggested something more than a simple start-of-year adjustment.

“January’s weakness could have been explained by activity being pulled forward into December to nab a generous cash-back, but that softness has carried through February and March as well,” he said.

“We’ve now had three subdued months in a row, which indicates a weaker first quarter than expected. It’s not a sharp downturn, but it does show that confidence is still muted and buyers are taking their time.”

Meanwhile, property values held relatively steady through the softer sales environment, with the national median rising 0.2% in March and 0.3% across the first quarter.

In Auckland, property values were down 0.2% over the first quarter of the year and down 3.4% over the past 12 months.

“Auckland still looks expensive in dollar terms, but when you look at it against local incomes it’s more affordable than it has been for quite some time,” Davidson said.

“That’s helping support demand in that market, even if price growth remains fairly contained overall.”

First-home buyers remained steady in March, accounting for more than 27% of purchases nationally across the first quarter, above their long-term average of about 22%.

Davidson said the consistency of first-home buyer activity was fairly evenly spread across the country.

“Lower house prices compared to a few years ago, reduced mortgage rates and KiwiSaver withdrawals are all helping,” he said.

“But just as important is that many buyers don’t need a full 20% deposit. More than half of first-home buyer lending is still being done below that threshold, which makes a real difference to access.”