Sales activity soft but stabilising

REINZ chief executive Bindi Norwell

Nationwide, there were 6,368 properties sold in April, as compared to 5,973 in April 2017, according to REINZ.

Once seasonally adjusted, this was a 2.3% year-on-year increase in volume. But sales also inched up slightly – by 1.6% once seasonally adjusted – as compared to March, which saw a big drop in activity.

The fact that sales activity in Auckland continues to be subdued had an impact on the national sales figures.

Auckland saw 1,854 property sales in April, as compared to 1,810 sales in April 2017, the REINZ data shows.

Once seasonally adjusted, this actually equates to a 1.7% year-on-year drop in volume. But April did see a tiny lift – of 0.3% once seasonally adjusted – in sales, as compared to March.

In contrast, many other regions around the country saw big year-on-year increases in sales. These included the West Coast, Southland, Marlborough, Nelson and Manawatu/Wanganui.

At the same time, median house prices in most regions – apart from Auckland – continued to rise.

The national median house price came in at $550,000 in April. Once seasonally adjusted, this was up by 2.3% on $540,000 in April 2017, but down by 1.8% on March’s median of $560,000.

Auckland’s median house price was $850,000 in April. Once seasonally adjusted, this was down by 0.1% on $855,000 in April 2017 and down by 3.4% on March’s median of $880,000.

Again, in contrast, many regions around the country saw strong increase in median prices. These included Manawatu/Wanganui, Nelson, Otago, Southland, Gisborne and Hawkes Bay.

REINZ chief executive Bindi Norwell says price increased in 14 out of 16 regions which shows the continued demand for good properties, particularly as listings continue to remain low in many parts of the country.

Auckland was an exception to this but the region’s property market is showing signs of becoming more complex with different sales patterns within the region, she says.

“For example, Franklin sees a steady demand, with moderate increases in sales, prices holding and a good listing base, whereas East Auckland is seeing a slowdown in auctions and open home attendees.

“Rodney continues to see an influx of out of town buyers looking to re-settle within the region as parts of Rodney are currently experiencing high growth in commercial building activity.

“Auckland’s property market is always changing, but it is likely that there won’t be any major changes to the current patterns until spring.”

Overall, Norwell believes New Zealand’s housing market is in a good position in terms of sales volume increases and prices, with more sales in affordable price brackets a positive.

For ASB economist Kim Mundy, the REINZ data shows that housing market activity continues to be soft although the pace of decline in annual sales activity does appear to be stabilising.

The days to sell remains higher in larger centres which indicates “tightness” in those centres continues to ease and this is being reflected in prices, she says.

“On the other hand, smaller regional markets continue to play catch up, following strong price growth in the larger centres over the past years.”

Mundy says the tug-of-war between stretched affordability/legislative changes versus still-strong population growth and low housing supply looks to have continued.

“But we expect sales activity and price growth to remain below par over 2018 and that volatility will remain a key theme in the housing market until greater policy clarity emerges.”