A slow recovery appears to be taking hold in the property market, new data from the Real Estate Institute.
Chief executive Jen Baird said October was a more positive month in the market, with a lift in sales and small increases in the median sale prices recorded.
“There seems to be light at the end of the tunnel. Although challenges like the cost of living remain, positive signs are emerging. Falling interest rates, increased inventory in the market, and greater activity during open home events are all reflected in the data for October,” she said.
The number of properties sold across the country was up 20 percent compared to October 2023.
Baird said vendors and buyers seemed increasingly confident and there were signs the market would be busier leading up to Christmas.
The national median price was up 0.7 percent year-on-year and 1.9 percent month-on-month.
Excluding Auckland, the median price was up almost 3 percent on a year earlier.
“The New Zealand property market is experiencing a dynamic shift. 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. This environment encourages buyers to be more strategic in their approach, making them feel confident in negotiating with vendors to reach an agreeable price,” Baird said.
The number of properties coming on to the market in the month lifted by 21.4 percent.
The House Price Index (HPI) for New Zealand showed a decrease of 1.1 percent year-on-year but an increase of 0.5 percent month-on-month. Over the past five years, the average annual growth rate for New Zealand’s HPI has been approximately 4.8 percent, although it currently sits at 15.4 percent below its peak in 2021.
The HPI is designed to smooth out fluctuations in the median price data caused by the makeup of properties sold.
ASB economists said the data showed a mixed picture.
“The seasonally adjusted HPI, our preferred measure, dropped by 0.5 percent over the month, and prices remain lower than year-ago levels.
“Only four regions posted monthly gains, with Nelson experiencing the highest increase at 1.8 percent month-on-month, seasonally adjusted.
“Conversely, nine regions saw a monthly decline in prices, with Taranaki and Tasman witnessing the largest drop respectively at 2.9 percent month-on-month and 2.2 percent month-on-month, seasonally adjusted.
“In Canterbury and Bay of Plenty, house prices were unchanged. House prices in Auckland dropped by 0.9 percent after a marginal lift in September.”
But they noted that the national median days to sell a property dropped for the first time in five months to 46 days from 49.
“The official cash rate (OCR) cuts have not had a notable effect on the housing market thus far, especially prices. Mortgage interest rates began to fall in mid-July, and declines accelerated following the OCR cuts in August and October.
“However, since then, we have yet to observe a substantial market movement. New listings have continued to rise each month, causing housing inventory to increase and reach a decade-long high. The current housing stock exceeds 32,000 units, roughly 20,000 more than the trough during the recent boom in 2021.
“This elevated level of inventory benefits buyers and is likely to keep prices constrained for at least the next few months. However, with the median days to sell a house declining, we might be seeing early signs of a turning market. We will be watching the trend in days to sell closely in coming months.”
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