After a surprisingly active month of July, the housing market saw a slowdown in August, mostly due to the low number of listings. For more on this, here’s our summary of what’s happening in the property space.
Lowest level of sales for seven months
According to REINZ’s latest property data, the number of residential properties sold across New Zealand in August dropped by 6,1% from a year ago (and by 6.9% excluding Auckland).
“This was a bit of a surprise given the strength of July’s figures, however, an extremely wet August across most parts of the country and the past three months having the lowest number of new listings of any consecutive three months since records began in 2007, look to have been contributing factors,” said REINZ CEO, Bindi Norwell.
Among the regions with the biggest drop in annual sales volumes were Southland (-33.2%), Hawke’s Bay (-18.4%) and Taranaki (-16.6%). On the other end of the spectrum, the regions that saw the greatest increase were Tasman (+12.3%), Bay of Plenty (+7.7%) and Nelson (+2.9%). As for Auckland, annual sales decreased by 4.1% year-on-year – the region’s lowest level in four months.
How low listings impact the market
If you’re planning your next property move and cautiously weighing your options, you’re not alone.
“With limited choice in many parts of the country in terms of new listings, we’re hearing from a number of agents that people are waiting to purchase before they put their own property on the market, which is slowing the whole market down,” said Norwell. “Hopefully, as confidence starts to improve over the coming months, we’ll start to see this flow through to new listings which leads to more choice for buyers.”
What does ‘affordable’ look like?
Over the past few years, ‘affordability’ has been the buzzword in the New Zealand’s property market. But what does ‘affordable housing’ currently mean?
According to recent Valocity data, New Zealand first-home buyers pay on average $400,000 to get on the property market, but figures vary significantly across the country. The average first-home price is much higher in centres like Auckland ($770,000) and Queenstown ($840,000) than it is in Dunedin ($410,000) or Whanganui ($260,000).
Plus, falling interest rates are pushing up lower quartile house prices in several regions. In August, Canterbury was the only region nationwide where the lower quartile price dropped instead of increasing. And in seven regions (Bay of Plenty, Waikato, Hawke’s Bay, Manawatu/Whanganui, Taranaki, Otago and Southland), lower quartile prices reached record highs – increasing the size of the required deposits.
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Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek specialist advice.