Market keeps getting worse as sales collapse

House sales slumped to their lowest in 31 years last month, excluding 2020.

Thursday, May 11th 2023

The latest REINZ data show just 4,262 houses were sold in April, down from 5,984 in March and down 15.3% compared to the same month last year.

It is the lowest number of sales since REINZ started recording sales in their current format. This excludes April 2020 when the property market was almost at a standstill because of pandemic lockdowns.

“People are waiting for the peak of inflation, a settling in interest rates and some clarity around the outcome of this year’s election,” says Jen Baird, REINZ chief executive. “This is what is keeping activity low.”

Sales are running 13.5% lower than in April 1992 when 4,929 properties were sold.

Across the country, excluding Auckland, sales counts dropped by 11.5% over the past year and 26.9% month-on-month.

REINZ chief executive Jen Baird says while that seems a considerable fall, in seasonally adjusted terms, April was 8.1% stronger when compared to the usual seasonal change at this time of year.

Prices falling

Prices are also continuing to drop. Baird says while median prices have declined, they are moderating. 

Nationally, the median price dropped 10.9% year-on-year to $780,000.

The biggest drops in prices were Northland, down 24.7% compared to April last year, Auckland, down 23%, Waikato, down 20% and Taranaki, down 20.7%.

Median prices on the West Coast and in Otago were up annually by 8.6% to $379,000 and by 3.2% to $680,000 respectively.

Two districts reached record median prices - Grey District at $398,000 and Ashburton District at $615,000.

Days to sell rose to 47 days last month — up nine days compared to April last year, and up two days when compared to March.

Economy challenging

Baird says the figures show the continuing challenge the economic climate has put on market pace.

“April tends to be slow due to public and school holidays, and it’s clear those factors combined with a tight economy are still influencing the market.

“Salespeople across the country are reporting glimpses of green shoots in the market this month as first home buyers show more interest after the Reserve Bank’s announced its easing the LVR restrictions.

“They are also seeing further alignment as vendors come with a desire to meet the market – those who are prepared to negotiate and be realistic are the ones selling, there are buyers out there ready to buy,” she says.

Inventory numbers

At the end of April, the total number of properties for sale was 28,643 up 1,593 properties (+5.9%) year-on-year, and down 2.19% month-on-month.

Inventory levels have dropped slightly month-on-month, but the year-on-year figures are still showing an increase as the pressure on mortgage rates supresses buyer activity, says Baird.

Nationally, new listings declined by 18.9%, from 8,806 listings in April last year, to 7,142 listings last month.

“However, for those looking to buy, lower prices and good stock levels means there are opportunities as we head into the cooler months.”

She says the country won’t know if the bottom of the market has been reached until it has passed, so for those who can get their financial ducks in a row, now is a good time to buy.

The REINZ House Price Index (HPI), which measures the changing value of residential property nationwide, shows an annual drop of -12% for New Zealand and a -10.7% decline for New Zealand excluding Auckland.


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