Housing Minister Chris Bishop has unveiled the Government’s plan to “flood the market’ with land for development in a bid to end New Zealand’s housing crisis. Video / Michael Craig
A steady housing market recovery is expected later this year, according to ASB economists.
The housing market cooled in June, with average nationwide prices and sales falling.
The Real Estate Institute (REINZ) house price index - a measure of the changing value of properties - fell 0.7% from a month ago, but rose just over 1% from a year ago.
House sales in June fell sharply, down 13% on the previous month.
“It was the weakest number of sales on a seasonally adjusted basis since April 2023,” ASB economists said this afternoon.
“Among the main centres, Auckland led the fall in sales, and there were also large slumps in several regions such as the West Coast, Gisborne, Tasman, Canterbury and Manawatū-Wanganui.”
REINZ said the national seasonally adjusted median price fell 1.3% from a year ago and was flat from May to be $770,000.
In Auckland, prices rose 2.4% from a month ago and were up nearly 5% from a year ago, to a median price of $1.05 million.
Sales counts fell 15% from a year ago, and the national inventory level increased 29% from a year ago, while listings rose 26%.
“The increased number of listings coming to market continues the trend we have seen all year, with high levels of choice for buyers nationwide,” Real Estate Institute chief executive Jen Baird said.
“The winter months do tend to see fewer people choosing to sell, and this year is no different.
“Salespeople are seeing some properties come to market due to high interest rates, cost of living pressures and changing employment circumstances,” Baird said.
In Auckland, prices rose 2.4% from a month ago and were up nearly 5% from a year ago. Photo / Martin Sykes
Nationally, the median days to sell rose by one day to 48 days.
Baird said there was a “notable decrease in buyer activity” and a reduced sense of urgency.
“As more listings come to a well-stocked market, those who are in the position to buy are taking their time to carefully select their ideal home,” she said.
Inflation outlook
ASB economists said inflation was likely to keep slowing.
The economists expected the Reserve Bank to cut the Official Cash Rate (OCR) by 25 basis points in November.
“But the risk is the bank delivers 50 basis points of cuts in 2024. While a lower OCR is likely to support the housing market at the margin, there are still numerous headwinds facing the sector.”
ASB said these headwinds included a slowdown in net permanent and long-term migration, which would weaken demand for housing.
“At the same time, a rising unemployment rate may also continue to weigh on the market, until job security feels more assured.”
OCR cuts should help more people feel confident about job security, ASB said.
“We do not expect the housing market will rebound quickly in the short term until economic growth is stronger and unemployment stabilises.
