Prolonged collapse of house prices and sales

The housing market slowdown continues with sales down 4.3% on September and a massive 34.7% down compared to October last year.

REINZ’s latest data show 4,892 sales were made nationally last month compared to 7,486 in the same month last year. Adjusting for seasonality, last month’s sales were down 9.5%. The month performed poorer than expected as there is usually an notable increase in sales during spring.

In Auckland sales were down 8.2% compared to the previous month. For the rest of the country sales fell 2.4% compared to September.

Hesitancy and uncertainty are pervading the market where there was certainty and confidence last year, says Jen Baird, REINZ chief executive.

At the end of last month, the total number of properties on the market was 26,577 – an annual increase of 74%, from 15,217 in October last year.  

Four regions had a listings uptick of 20% or more. Northland had the biggest increase, up 48.8%, followed by Waikato 36.5%, Neilson 31% and Marlborough 20%.

However, the pace of house price falls could be stabilising. The national median price sat at $825,000 last month, down 7.5% compared to October last year, but up 1.9% compared to September.

The median residential property price for the country, excluding Auckland, dropped 3.4% — from $750,500 to $725,000, but it was a month-on-month increase of 1.5% from $714,000 in September. 

Four regions had median price, with Marlborough reaching a record — up 20.7% to $781,000.

Auckland’s median price dipped 12.7% compared to October last year, from $1,249,000 to $1,090,000. The region has recorded six consecutive months of price declines for the first time since August 2008/January 2009. All seven Auckland districts had annual median price falls, with the North Shore down 18.2%, followed by Papakura, down 17.3%.

The REINZ House Price Index (HPI), which measures the changing value of residential properties across the country, is down 10.9% compared to October last year an down 12.4% compared to its November peak, but up just 0.2% on September.

Wellington was down 12.7% on the index compared to July last year, the biggest annual drop in the region’s HPI since records began in 1992. Wellington has now ranked in the bottom two of all regions on the HPI for nine consecutive months. 

Auckland had an annual drop on the index of 7.1%.

The median days to sell a property was 44 – up 10 days on October last year.

Baird says the market pace has slowed because of rising interest rates and the cost of living, tax legislation and property regulation, tightened lending criteria, and global events with macro-economic impacts.

“Properties continue to change hands, and people continue to make life decisions. However, buyers and vendors are acting with caution, weighing up their options. Investors, however, are continuing to step back. Owner occupiers — backed by equity — dominate the market.”

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