Tighter credit conditions, higher interest rates and a sharp increase in supply are hammering the market. Sales are slower to complete, property is staying on the market longer and prices are dropping.
House prices are now down 6% from last November’s peak and sales across the country sales are 28.4% down on last year.
The national median selling price dropped from $875,000 in April to $840,000 — a $35,000 decline and a month-on-month drop of 4%..
The median property price for New Zealand, excluding Auckland, dropped 3.3% from $755,000 in April to $730,000 in May.
In Auckland’s expensive central suburbs the median price dropped from $1.3 million in April to $1.18 million in May - a decline of $120,000., while the median price on the North Shore dropped $145,000 in May going from $1,450,000 in April to $1,305,000.
Across the whole of Auckland region there was negative growth. The median price across Auckland region has dropped 13.5% since its peak of $1,300,000 in November last year. In the six months prior, median property prices had increased 13%.
Auckland’s median price was down 2.2% compared to May last year, from $1,150,000 to $1,125,000. The last time the annual median price dropped in Auckland was October 2019, when it was down 0.1%. The region also recorded a month-on-month drop of 3.9% — down from $1,171,000 in April.
The West Coast is the only region to achieve a new record median price, reaching $395,000 — up 30.8% from $302,000 at the same time last year. This was the first record price in the region since December 2021. Overall, the month had the least number of record median prices during a May month since 2019.
Apart from the deep south, house prices fell across the country. The REINZ House Price Index (HPI) fell 0.8%, the sixth consecutive monthly fall and annual house price growth slowed to below 4%. Since peaking in November, the seasonally adjusted HPI has fallen 6%.
Sales too, seasonally adjusted, across the country fell in the month and were down 28.4% on a year ago.
The median number of days to sell at 40 days managed to tick over the long-run average of 39 days.
As buyers sit out the carnage from ringside, the supply of listed property trends higher. Rising interest rates are a big reason for the rapid cooling in the market.
REINZ chief executive Jen Baird says the seasonally adjusted figures from April indicate a greater drop than expected.
“With the exception of the West Coast, median prices in the regions have come off their peak. Auckland is the only region to see an annual decrease in median price — down 2.2% on the same period last year.
Kiwibank says all the above indicates that house price falls are yet to plumb the lows of the current cycle. The bank continues to forecast that house prices will fall 10-11% by the end of this year before a muted recovery from late next year.