Gisborne property sales were up 112 per cent year-on-year.

REINZ’s May data shows more listings and properties selling more quickly than a year ago.

These increases contrast with challenges in securing finance, changes in the job market, and the wait on OCR and interest rate to come down.

The total number of properties sold in May rose 8 per cent compared to April, from 5,834 to 6,303, and by 6.8 per cent year-on-year, from 5,903 to 6,303. Gisborne was up by 112 per cent year-on-year, and 11 of the 16 regions had increases in sales count month-on-month and year-on-year.

Nationally, seasonally adjusted figures show a 5.2 per cent increase, indicating that year-on-year sales counts performed slightly above expectations.

Listings increased nationally by 25.4 per cent year-on-year from 7,359 to 9,225, continuing a trend since the start of the year. Twelve of the 16 regions have had a rise in new listings year-on-year with notable increases in Wellington (103.3 per cent), Hawke’s Bay (34.3 per cent), Marlborough (33.3 per cent), Auckland (30 per cent), Otago (31.4 per cent) and Waikato (20.7 per cent).

Stock levels for May increased 22 per cent, or 5,912, from 26,685 to 32,598 year-on-year and dropped 3.6 per cent, from 33,815, month-on-month.

The national median sale price declined slightly by 1.3 per cent year-on-year, from $780,000 to $770,000, and dropped 2.5 per cent compared with April, from $790,000 to $770,000.

The seasonally adjusted figures show a 1.2 per cent drop, showing prices performed slightly below usual.

Ten of 16 regions had year-on-year price increases with the West Coast leading the way with a 14.1 per cent rise, from $355,000 to $405,000. Compared to April, only three additional regions had median sale price increases (Hawke’s Bay, up 2.3 per cent to $675,000; Manawatu-Wanganui, up 0.9 per cent to $560,000; and Canterbury, up 1.5 per cent to $680,000).

Median days to sell dropped by five, from 49 to 44 days, compared to a year ago.

The HPI for New Zealand stood at 3,595, down 1 per cent from the previous month and up by 2.3 per cent for the same period last year. The average annual growth in the New Zealand HPI over the past five years has been 5.5 per cent per annum, and it’s 15.9 per cent below the 2021 peak of the market.

Affluent Markets

CoreLogic NZ’s Mapping the Market tool reveals 221 of the 938 suburbs analysed had a drop in property values of at least 1 per cent, including 10 which fell by at least 5 per cent over the three months to June.

CoreLogic’s chief property economist, Kelvin Davidson, says the loss of momentum since March has been evident across affluent markets and areas better known for affordability.

“On the higher end, Takapuna in Auckland, and Onemana and Tairua in Thames Coromandel, had value drops of 5-6 per cent. Suburbs within more affordable price points like Fordlands in Rotorua and Mataura in Gore District had even bigger value falls by 7-9 per cent.”

By contrast, 253 suburbs had gains of at least 1 per cent, with eight up by at least 5 per cent since March.

The West Coast was home to some of the suburbs with the most value gains: Cobden and Runanga, both in Grey District, were the top two suburbs for growth, at 16.9 and 13.1 per cent respectively. The median values in these two suburbs still sit at around $300,000 or less.

Meanwhile, home value growth completely petered out at the end of May, dipping 0.2 per cent.

CoreLogic’s House Price Index now shows an average property value across the country of $931,438, up by just 1 per cent from a year ago, but still roughly 11 per cent below the 2021 peak.

Auckland has been at the forefront of the recent slowdown and Waitakere was the only sub-market to avoid falls. The remaining markets saw declines ranging from 0.4 per cent in Franklin to more than 1 per cent in North Shore and Manukau.

Over the three months to May, only Rodney saw growth in property values (1.5 per cent), with the rest of Auckland down by at least 0.6 per cent, and as much as 2.6 per cent.

After a slightly more robust result for April, Wellington’s property market slid back again in May, with Kapiti Coast the only area to record a meaningful gain (1.8 per cent). Meanwhile, Porirua dipped 0.2 per cent, and Upper Hutt and Wellington City saw values fall in May by about 1 per cent.

Touch Of Realism

Sellers have pulled back on price expectations and Barfoot & Thompson, Auckland’s largest residential real estate agency, says sales have taken off to the highest level since May 2021.

Last month the agency sold 916 residential properties, up 30 per cent compared to April, and up 27 per cent compared with May last year.

Managing director Peter Thompson says the boost was the result of vendors cutting their asking prices. However, the number of properties for sale are at their highest level in 13 years, just as winter looms, generally a slow time for sales.

Thompson says for every home being sold, there are another six on the market.

The agency received 1,695 new residential listings in May, pushing the total number of properties it had at the end of the month to 5,763, barely changed from 5,770 in April, and up 31 per cent compared with May last year.

Prices are also mixed. The average selling price dropped for the second month in a row to $1,182,630. That’s down $30,198 compared to April, and down $44,865 compared to March.

The median selling price headed in the other direction, rising to $1,011,900 in May from $1,007,500 in April.

Housing Stock

QV says the housing market has largely stalled, with buyers and sellers continuing to grapple with difficult economic conditions. Against this backdrop an excess of housing stock on the market is maintaining downward pressure on prices. “So those who are in a position to buy right now, have the upper hand,” says QV operations manager James Wilson.

The QV House Price Index shows the average dwelling value fell 0.2 per cent over the three months to May this year. That’s the first quarterly decline since July last year and follows a 0.1 per cent increase in the three months to April this year.

The biggest declines were in Auckland, where the average dwelling value dropped 1.4 per cent, followed by Tauranga, which slipped 1 per cent.

Going against the trend, Invercargill had the biggest rise in average value at 3.2 per cent, followed by a 2.5 per cent lift in Rotorua.

Meanwhile, average asking prices on Trade Me Property dropped for the second month in a row in May as vendors become more realistic.

Across the country the average asking price declined 2.3 per cent in May compared to April.

The biggest drop for the month was in Hawke’s Bay, where the average asking price declined 3.7 per cent, while Gisborne was the only district to record a rise, up 5.2 per cent.

Around the main centres asking prices were down 2.3 per cent for the month in Auckland, -2 per cent in Wellington, -0.2 per cent in Canterbury and -3.2 per cent in Otago.

On The Tools

The latest building work figures from Statistics NZ show the anticipated slowdown arrived in the first quarter (Q1) of this year.

The total value of building work undertaken throughout the country was $8.4 billion in Q1, down 1 per cent compared to Q1 last year, bringing an end to the latest run of building industry growth.

Statistics NZ’s seasonally adjusted figures, which remove the effects of price changes, show the amount of building work being undertaken in Q1 this year was down 4 per cent compared with a year earlier. That was made up of a 4.8 per cent decline in residential construction work and a 2.8 per cent drop in non-residential work.

The fall in building activity coincided with a 2.8 per cent drop in the retail sales volume of hardware and building supplies in the March quarter.

What’s Driving House Prices?

HOUSE PRICES: DOWN

REINZ data shows the national median sale price declined slightly by 1.3 per cent year-on-year, from $780,000 to $770,000, and dropped 2.5 per cent compared with April, from $790,000 to $770,000. The seasonally adjusted figures show a 1.2 per cent drop, showing prices performed slightly below usual. Ten of 16 regions had year-on-year price increases with the West Coast leading the way with a 14.1 per cent increase, from $355,000 to $405,000. Compared to April, only three additional regions had median sale price increases (Hawke’s Bay, up 2.3 per cent to $675,000; Manawatu-Wanganui, up 0.9 per cent to $560,000; Canterbury, up 1.5 per cent to $680,000).

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’s not expecting to make changes until next year.

INTEREST RATES: DOWN

Kiwibank is offering the lowest one-year fixed rate at 6.99 per cent. The lowest two-year fixed mortgage interest rate is 6.75 per cent offered by ASB, TSB and Westpac, while the lowest three-year fixed mortgage interest rate is 6.39 per cent from ASB and Westpac. On the four-year rate, the lowest is 6.39 per cent offered by ASB and Westpac and the lowest five-year rates is also 6.39 per cent, which can be borrowed at ASB and Westpac.

BUILDING CONSENTS: DOWN

The number of new homes consented in April fell 1.9 per cent after falling 0.2 per cent in March, Stats NZ data show. In the year ended April, the actual number of new dwellings consented was 35,401, down 23 per cent from April last year. In the month there were 2,926 new dwellings consented, comprising: 1,354 stand-alone houses, 1,296 townhouses, flats, and units, 178 retirement village units and 98 apartments.

MORTGAGE APPROVALS: DOWN

April’s new mortgage approvals were $5.9 billion, down 1.8 per cent from $6 billion in March. The total monthly value of new mortgages increased 36.9 per cent when compared to April last year. The seasonally adjusted total value of new mortgages rose 1.5 per cent from March. The share of new lending to investors lifted to 19.9 per cent, up from 17.9 per cent in March. This is also an increase on April last year, when the share to investors was 16.6 per cent. Investors took out mortgages totalling $1,182 billion compared to $1,080 billion in March and $718 million in March last year.

The average value of a loan increased 5.9 per cent over the same period. Mortgages to first-home buyers totalled $1,264 billion compared to $1,342 billion in March, but up on $1,049 billion a year ago, while lending to owner-occupiers was at $3,401 billion, down on $3,524 billion in March. The average new loan value across all borrower types increased to $376,988 in April, up two per cent from $369,633 in April last year. There were 15,722 new mortgage com

IMMIGRATION: DOWN

Stats NZ’s data shows NZ citizens continue to leave the country at record levels, with more than 81,000 Kiwis departing long-term in the year to April for a net loss of 56,500, exceeding the previous record of 52,000 in the year to March. On the other side of the ledger, India led migrant arrivals with 48,000. New Zealand’s total net migration gain remains at historically high levels, but it continues to decline. The country gained 98,500 migrants in the year to April, but this is down from 106,000 in the year to March.