Taranaki increased 10.3 per cent month-on-month in the latest figures.

The latest REINZ data shows while sales are off the lows of last year, they remain low. Similarly, prices have been effectively tracking sideways.

Looking into the details of December’s update, there are a little over 5,000 house sales each month. While that is higher than at the start of last year, it’s still well down on pre-pandemic levels of more than 6,000 each month. Sales remain low right across the country, including larger centres like Auckland, Wellington and Christchurch.

Month-on-month, sales for New Zealand dropped 20.8 per cent (from 6,493 in November 2023 to 5,145 in December 2023), in keeping with the quieter levels of activity that usually happen over the holidays.

For NZ, excluding Auckland, the total number of properties sold reflected a similar pattern, increasing 17 per cent (from 3,135 to 3,667) year-on-year, and declining 16.7 per cent (from 4,401 to 3,667) month-on-month, as expected.

The data shows that almost every region recorded year-on-year increases in the number of properties sold in December. Tasman led the way with the strongest year-on-year increase in properties sold (+47.8 per cent), followed by Gisborne (+35.7 per cent) and Northland (+31.3 per cent). Taranaki was the only region to see a drop in the number of properties sold year-on-year (-8 per cent).

On the prices front, Westpac says the REINZ House Price Index nudged down slightly in December (after adjusting for normal seasonal variations). Looking at the longer-term trend, prices have effectively been tracking sideways since the middle of the year and have risen by just 0.5 per cent over the past 12 months.

Looking at December, median sale prices were mixed, with fewer than half the regions increasing month-on-month.

Nelson, Taranaki

Nelson and Taranaki stood out, with Nelson’s median price increasing 10.5 per cent ($650,000 to $718,500) and Taranaki increasing 10.3 per cent ($580,000 to $640,000) month-on-month. The other regions that increased month-on-month ranged from 1.8-3.5 per cent month-on-month. Year-on-year, median prices remained steady, with the national median sale price decreasing 0.7 per cent year-on-year to $779,830. There was no change in the median price for NZ, excluding Auckland, both year-on-year and month-on-month, with the price remaining at $700,000.

Nine of the 16 regions saw an increase in their median sale price year-on-year: Tasman and West Coast had the highest increase with 5 per cent year-on-year, followed by Nelson (4.1 per cent) and Taranaki (3.2 per cent). This is a notable change compared with November, when only one region (Canterbury) recorded a year-on-year median price increase.

Annual growth in construction costs has reduced to the lowest level in around seven years. CoreLogic’s latest Cordell Construction Cost Index (CCCI) recorded a 0.8 per cent rise in the fourth quarter of last year. Despite a slight uptick in the pace of growth compared to each of the previous three quarters (0.4-0.6 per cent), it remained below the long-term average of 1.1 per cent.

This brought the annual change to 2.4 per cent, well below the 10-year average of 4.5 per cent. This is the slowest annual rise since the third quarter 2016 (2.2 per cent), and the second slowest since records began in third quarter of 2013.

CoreLogic’s chief property economist, Kelvin Davidson, says the industry is simply facing less pressure on overall capacity compared to its peak at the end of 2022, where over-stretched builders struggled to keep up with workloads for new houses and renovations. On the flipside, however, there have been some price rises on general hardware, mainly imported products.

Davidson says the pace of construction cost growth could remain subdued this year. “The surge in net migration may help to restrain the pace of construction sector wage growth, which could also cap overall cost growth, considering that salaries account for 40-50 per cent of the total cost of a new build, excluding land.”

Year-End High

The Auckland property market finished the 2023 year on a 12-month high with prices and sales holding on to strong gains made since August.

The median sales price at $1,045,000 was the highest for any month for 12 months, and 9.5 per cent higher than at the year’s low point in July. It was also up 2.7 per cent on November’s median price.

The median sales price over the last four months of 2023 increased 3.9 per cent. Sales in December at 830 were excellent for a three-week month, and nearly 60 per cent higher than December the previous year.

“While prices have picked up significantly since August, the rise has been steady and gradual, with buyers being selective and price conscious,” says Peter Thompson, Barfoot & Thompson’s managing director.

“Sales numbers in the last quarter of the year are far higher than in the same period in 2022 and are similar to trading patterns experienced prior to the big surge in activity in 2020 and 2021. The consensus of those in the market is that prices and sales will continue to rise, but at a modest pace.

“The average sales price for the month at $1,191,031 rose 0.4 per cent in December, and the rise over the past four months has been 7.1 per cent. New listings for December were 666, and the agency started the new year with 4,383 properties on its books.”

The average year-on-year declines for median and average prices shows that by the end of 2023 the market had recovered a percentage of the losses experienced when it peaked in November 2021.

The average 12-month median price for last year was $998,500, a decline of 10.6 per cent on 2022’s all-time high average of $1,117,000 and a 9.4 per cent decline on that for 2021.

Southern Highlight

While the rest of the country has gone through a property market downturn over the past year, there’s one region that may have missed the memo.

Realestate.co.nz data shows that while the national average asking price dropped from $920,422 in December 2022 to $877,216 in December last year, the Central Otago/Lakes District shot ahead with a 16.2 per cent year-on-year increase and a 13.4 per cent increase month-on-month. Vendors were asking an average $1.59 million.

Spokeswoman Vanessa Williams says it was a record both for that region and the country as a whole. “Central Otago/Lakes District is a lifestyle region. Despite its distance from major business hubs, it boasts the highest average asking price in the country.”

The average asking price in Central Otago/Lakes District is around half-a-million dollars more than in Auckland.

House Prices Up

Doubts house prices are rising were wiped out with the third consecutive increase in December.

The CoreLogic House Price Index shows after October’s 0.4 per cent increase and the 0.7 per cent gain in November, December saw a rise in property values of one per cent.

This is the strongest monthly gain since January 2022 (2.1 per cent). The average value now stands at $924,489, up 2.1 per cent over the past three months since September’s cyclical trough.

However, national property values remain 3.3 per cent below this time last year, and 11.4 per cent lower than the peak from two years ago.

The gains were widespread across the main centres in December, with Tauranga, Auckland and Christchurch all registering increases of more than 1 per cent.

Davidson says while the continued gains in property values in December weren’t a surprise, he’s also anticipating a degree of continued “patchiness” this year, in terms of the changes from month-to-month as well as variability across the regional markets.

“A further rise in property values in December seemed almost inevitable given housing market sentiment has risen in recent months. This is off the back of several factors including the change of government, a peak (and even some falls) in mortgage rates, continued growth in employment, and soaring net migration.”

Consents Drop

New building consents dropped for the fourteenth month in a row in November.

Stats NZ says there were 2,958 dwelling consents issued in November, down 36 per cent from the same month last year. New consents comprised 1,462 stand-alone houses; 1,255 townhouses, flats, and units; 123 apartments; and 118 retirement village units.

Consents per 1,000 people are sitting at just over seven, compared with 9.8 in the year ended November 2022, but still slightly higher than the long-term average.

The annual total of new consents came to 38,209, compared with May 2022’s peak of 51,015, the lowest figure since October 2020. This isn’t bad when the general consensus is the country needs to build about 35,000 houses a year to keep up with population growth.

These latest figures are still quite high when considering the 2000’s peak was about 33,000 during a housing expansion.