Listings on the housing market are at a level not seen since 2015. And REINZ data also reveals higher sales counts and higher median sale prices.

Listings increased substantially, up 23.9 per cent to 11,455 nationally compared with March last year. Wellington had 32.4 per cent more listings; Auckland 31.4 per cent. Only Nelson (-2.7 per cent) and West Coast (-1.4 per cent) recorded declines in listings compared with March last year.

The national median sale price increased 2.7 per cent from $779,000 to $800,000 year-on-year; it also increased 1.1 per cent from February, from $791,500 to $800,000.

For New Zealand, excluding Auckland, the median price also increased – it was up 2.3 per cent year-on-year from $695,000 to $711,000, and up 0.1 per cent month-on-month from $710,000 to $711,000. In Auckland it was up 5 per cent from 2023, to $1.05 million.

Nationwide inventory levels increased 13.5 per cent from 29,284 to 33,245 properties year-on-year – the highest level since 2015.

The house price index was down 1.2 per cent from February but up 2.6 per cent from March last year. Auckland’s HPI was up 2.2 per cent from March last year. The median days to sell measure dropped by six compared to March 2023, to 38 days on a nationwide basis. Auckland’s days to sell dropped six to 39.

Winter Effect

Unsold houses sitting on the market could be a major dampener for the market during winter.

Barfoot & Thompson, Auckland’s largest real estate agency, and realestate.co.nz have record listings. The agency had a total of 5,741 residential properties available for sale at the end of March, up 21 per cent compared to March last year. Stock levels are at their highest for any month of the year for at least 10 years.

Realestate.co.nz had 11,455 properties listed in March, up 23.9 per cent compared with March last year, meaning a total of 33,425 properties were on its books – the highest in any month of the year since May 2015. Stock levels have only been above 30,000 once before and that was in February. March saw a significant jump in the average and median selling prices recorded by Barfoot & Thompson.

The agency’s median selling price rose $80,000 (8.2 per cent) to $1,050,000 in March from February, but was still down $190,000 compared to a record high of $1,240,000 set in November 2021.

There was an even bigger increase in the agency’s average price in March, which was $1,227,495. That’s up $111,345 (10 per cent) compared to February. This is edging closer to the record high of $1,278,647 set in December 2021.

Realestate.co.nz says average asking prices are down. The national average asking price dropped by almost $20,000, from $927,312 in February to $907,483 in March, but was still up by $23,660 (+2.7 per cent) compared with March last year.

‘Unsold houses sitting on the market could be a major dampener for the market during winter’

Soft Quarter

Muted gains continue in house price recovery across the country. CoreLogic’s House Price Index rose 0.5 per cent, taking values 1.1 per cent higher over the first quarter of this year.

The average property value now stands at $934,806, up 3.2 per cent ($29,361) from September’s trough, but still 10.4 per cent (-$108,455) below the recent peak.

The inconsistent nature of the upturn was evident, with Wellington rising strongly (0.9 per cent), and Christchurch, Dunedin and Auckland also showing gains (0.4-0.6 per cent), but Tauranga and Hamilton edging down 0.2 per cent.

“New Zealand’s housing market can probably be described as ‘not too hot, not too cold’,” says Kelvin Davidson, CoreLogic’s chief property economist.

“Digging beneath the surface in Wellington, there’s also clear evidence of variable performance. Upper Hutt, for example, spiked 2.3 per cent in March, with Kapiti Coast and Wellington City also posting solid growth. However, Lower Hutt and Porirua both saw values slide backwards, down by about 20 per cent from the peak.”

Outside the main centres, March’s data was also a mixed bag, with Invercargill, New Plymouth, Napier, and Rotorua all rising by at least 1 per cent, but Gisborne and Queenstown dropping 1.2 per cent apiece.

Given the broad (albeit slow) upturn has now been in progress for about six months, several regional markets have seen their annual house price growth rates turn positive. Hastings, Invercargill and Queenstown have had annual gains of about 3 per cent or more. However, Gisborne, Whangarei and Nelson are still about 2 per cent (or more) below the levels from a year ago.

Rents Up

Residential rents rose 7.1 per cent, or $40 a week, to a national median of $600 a week across NZ in the year to February, Tenancy Services data show. This was up from $560 a week in February last year.

The biggest increase was in Gisborne, where rent was up a massive 20.4 per cent ($105 a week) to $620 a week from $515 in February last year. In Auckland, the country’s largest rental market, the median rent rose 8.3 per cent ($50 a week) over the February year.

There was only one region where the median rent declined and that was the West Coast, where it dipped 0.5 per cent ($2 a week) to $368.

New Builds

February saw a bounce in new building consents, with numbers rising 15 per cent over the past month.

However, that bounce in monthly consent numbers is definitely not a sign the construction sector is heating up, says Satish Ranchhod, Westpac’s senior economist. February’s bounce was centred on the volatile medium-density housing sector and followed a particularly weak January result. “The result takes us back to trend, and that trend is firmly down.”

The number of new dwellings being consented has fallen 25 per cent to just over 36,000 in the past year. There have been sharp falls in most regions including Auckland (down 27 per cent), Wellington (down 40 per cent) and Canterbury (down 20 per cent).

That weakness has been a result of tougher financial conditions. High interest rates and sharp rises in building costs in recent years have made many projects uneconomical, especially given the softness in the housing market.

Consents for new dwellings have been dropping back for more than a year. However, the downturn in actual home building activity (down about 10 per cent over the past year) has been more modest than the sharp fall in consents, Ranchhod says.

Experimental statistics released by Stats NZ indicate that it takes about 18 months on average for consented new dwellings to be built.

Fewer new projects are coming to market, with many builders in the construction industry reporting weak forward orders. “As a result, we expect a sizeable downturn in building activity over the year ahead,” Ranchhod says.

That fall in building activity is occurring at the same time as population growth is booming, adding to the risk of housing shortages across the country.

Impaired Loans

Distressed housing loans are continuing to rise, February’s monthly figures from the Reserve Bank show, while across the entire banking system impaired loans rose above $4 billion as the economy worsens.

Non-performing housing loans rose $42 million, or 2.5 per cent.

During February, impaired loans actually dropped to $244 million from $259 million in January, while loans past 90 days due, but not impaired, rose to $1.47 billion from $1.41 billion in January and $908 million a year ago.

While the figures might seem high, they are well below those of the global financial crisis when the ratio of non-performing housing loans hit a high of 1.2 per cent between 2009-2011. It’s now sitting at 0.5 per cent.

What’s Driving House Prices?

HOUSE PRICES: UP REINZ data show March’s national median sale price increased 2.7 per cent from $779,000 to $800,000 year-on-year; it also increased 1.1 per cent from February, from $791,500 to $800,000. For New Zealand, excluding Auckland, the median price also increased – it was up 2.3 per cent year-on-year from $695,000 to $711,000, and up 0.1 per cent month-on-month from $710,000 to $711,000. In Auckland it was up five per cent from 2023, to $1.05 million.

OCR: STEADY The Reserve Bank’s official cash rate has been held at 5.5 per cent since July last year after the RBNZ indicated it was at the end of its tightening cycle. It is not expecting to make changes until next year.

INTEREST RATES: DOWN ASB has trimmed some home loan rates in response to cuts by Westpac, which moved its two-year fixed rate down to 6.75 per cent. ASB has matched that and also cut 16 bps from its five-year fixed rate to also match Westpac’s 6.39 per cent at that term. The last time a major bank had a two-year fixed rate at 6.75 per cent was in mid-July last year.

BUILDING CONSENTS: DOWN The number of new homes consented in February fell 6 per cent, compared to the same month last year, Stats NZ data show. Fewer new homes were consented in February than in each of the previous five February months, says Stats NZ construction and property statistics manager, Michael Heslop. However, the number of new homes consented was still higher than any February month between 1975 and 2018. Overall, there were 2,795 new homes consented in February. In the month there were consents issued for 1,297 stand-alone houses, down 0.5 per cent compared with February last year; 1,498 multi-unit homes, down 10 per cent compared with same month last year. Of the multi-unit homes consented there were 1,159 townhouses, flats and units, down 0.3 per cent compared with February last year, 199 apartments, up 13 per cent and 140 retirement village units, down 58 per cent.

MORTGAGE APPROVALS: UP February’s new mortgage approvals were $4.9 billion, up 44 per cent from $3.4 billion in January, but when seasonally adjusted up 4 per cent. Annually the value of new mortgages has risen 28.1 per cent from $3.8 billion in February last year. The share of lending to investors in February dropped to 17.3 per cent, down from 17.8 per cent in January. In February last year, the share to investors was 16.3 per cent. New mortgages to first-home buyers rose to $1.1 billion from $822 million in January, while lending to investors rose to $851 million from $607 million in January. The average value of new mortgages across all borrower types rose to $341,533, up 3.4 per cent from $330,269 in January. The average value of loans for first-home buyers increased 0.4 per cent between January and February, the average value for investors dropped 0.7 per cent to $481,063. Compared with February last year, average values across all borrower types have risen 2.1 per cent from $334,496.

IMMIGRATION: UP Stats NZ’s latest data shows migration is running at record figures again. There was an annual net migration gain of 130,900 in the year to February, with 253,200 migrant arrivals and 122,300 migrant departures. Annual net migration provisionally peaked in the year ended November 2023, with a gain of 142,200. The long-term average for February years pre-Covid is 118,800 migrant arrivals, 91,600 migrant departures, and 27,300 net migration. In the February year there were 226,000 migrant arrivals, exceeding the previous record before 2023, which was 138,300 in the March 2020 year. For non-New Zealand citizens, the net migration gain of 178,600 in the February 2024 year compares with a net migration gain of 84,100 in the February 2023 year.