Data from CoreLogic, realestate.co.nz and Barfoot & Thompson show house prices are plummeting even though there is optimism over interest rate cuts.

While vendors are becoming more realistic with asking prices, the stock of listings is at multi-year highs, giving credit approved buyers the power when it comes to negotiating a deal and agreeing a price.

In Auckland house sales have unexpectedly risen in the depths of winter, but prices have sunk.

Data from Barfoot & Thompson, Auckland’s biggest real estate agency, shows the median selling price last month dipped below $1 million for the first time since February, to sit at $970,000, down 4.9 per cent or $50,000 compared to June.

The average selling price fell 8.8 per cent, or $108,697 to $1,127,639, compared to June.

Asking prices on realestate.co.nz’s website also show the average below $1 million in Auckland – falling to $976,928 in July from $1,119,785 in February. That’s a drop of 12.8 per cent, or $142,857, over the five months.

The average asking price across the country has fallen for five consecutive months, to $816,797 in July from $927,312 in February – a drop of 11.9 per cent or $110,515.

CoreLogic’s new hedonic Home Value Index (HVI) shows a 0.5 per cent fall in values across New Zealand in July (the fifth monthly fall in a row) taking the total decline from February’s “mini peak” to 2.5 per cent.

The new hedonic methodology improves the timeliness and accuracy in measurement of changes to the residential real estate market, with weighted recent sales evidence demonstrating a prompt read on the re-emergence of soft housing market conditions across the country.

The median value across all stock nationally now sits at $827,515, with the fall from February's figure of $848,713 equating to about $21,200, CoreLogic figures show.

Values remain about 16 per cent below the boom-time peak of $982,918 in January 2022, although they’re still about 19 per cent higher than the pre-Covid level.

Sales boost

Picking up from the rock bottom of 681 sales in June, Barfoot & Thompson sold a third more in July to hit 902 properties changing hands. It was just below the 916 it sold in May and the most sold in July since 2021, when 1,235 were passed on to new owners.

Sales of the most expensive Auckland houses took a big hit, with the percentage of sales above $2 million dropping from 22.5 per cent in June to 14.6 per cent in July.

Adding to the property market’s winter chill, 10 of realestate.co.nz’s 19 regions experienced a slower than average rate of sale last month.

The power of listening

Barfoot & Thompson received 1,518 listings last month, just 12 above the number in June.

The flat listings meant total stock was down to 5,446 properties at the end of the month, the lowest since February. However, it was the highest level of stock on Barfoot & Thompson’s books for July since 2010.

Barfoot & Thompson director Stephen Thompson says buyers were attracted by a combination of vendors being prepared to meet the market and anticipation that prices may be at their low point given recent movement in mortgage interest rates.

“Those vendors who were prepared to listen to their salesperson and who were prepared to meet the market, saw results,” he says.

On realestate.co.nz the total number of homes for sale in July was up 32.3 per cent year-on-year to 30,556 properties for sale, while new listings received in July rose 31.3 per cent, breaking a seven-year trend of low listing levels in July.

Supply was unusually high for July, with almost 7,500 more total homes for sale than this time last year.

“Buyers have ample choice and time to decide,” says realestate.co.nz chief executive Sarah Wood. “But this will be a competitive market for many sellers - they should research local market trends and be prepared to negotiate to meet the market.”

Meanwhile, CoreLogic chief property economist Kelvin Davidson says the choice of property available to buy is already at a high level, and the shorter bright-line test could yet push it up further.

“Any extra listings that come to market from investors who are now off the hook for any capital gains tax sooner than they originally anticipated will only add to stock levels. In turn, this will tend to keep a lid on house prices.”