According to the Real Estate Institute of New Zealand, June saw “softened demand” in the housing market, with a drop in the number of homes sold and an increase in the number of days to sell.
The organization’s latest monthly report revealed that the number of homes sold nationwide fell by 38.1% in June – from 7,629 in June 2021 to 4,721.
The regions with the greatest decrease were Auckland (43.3% decrease per year from 2853 to 1618), Bay of Plenty (41.3% decrease per year from 458 to 269), Gisborne (39.5% decrease per year from 43 to 26) and Taranaki (decrease of 39.5% annually from 198 to 120).
REINZ said month-over-month, the number of homes sold nationwide fell 17.3% – from 5,707 in May to 4,721.
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The West Coast was the only place to have a month-over-month increase.
“We expect activity to decline over the winter months as part of the typical annual real estate market cycle,” noted REINZ Managing Director Jen Baird.
She said that since seasonally adjusted figures from May to June showed a 5.8% drop in sales, the month-on-month drop was not as steep as it seemed. Overall, however, sales activity remained lower than expected.
In June, homes also took longer to sell. The median was 44 days, up 13 from the same time last year.
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The number of houses sold at auction has also decreased. A total of 565 properties sold last month, representing 12% of overall sales. This was down from 26.3% in June 2021, but up from 10.9% in May.
REINZ described the auctions as remaining “tempered”.
With the total number of homes for sale however – an 89.5% increase from 13,869 in June 2021 to 26,271 – Baird commented that the stock is staying on the market longer.
“More inventory on the market, means more choice for buyers. With inventory growth in some regions in the triple digits, the urgency we’ve seen through 2021 has eased and buyers feel ‘they have more time to find the right property, undertake their due diligence and make an informed life decision,’ she said.
“However, there are several factors at play, including a longer sales process as we continue to see more sales conditional on financing or the sale of a home. Additionally, access to financing and the Concerns about inflation and rising interest rates are causing hesitation among potential buyers and sellers.”
Median home price now $850,000
REINZ also said median home prices rose both month-over-month and year-over-year.
The national median home price was now $850,000, up 1.2% from May’s $840,000. This is a 4.2% increase from $816,000 in June 2021.
While some regions saw year-over-year increases, others saw declines, leading Baird to comment, “We are seeing volatility across the country as the market seeks equilibrium at a more subdued pace.”
Auckland saw an increase of 2.8% month-on-month ($1,156,000 in June compared to $1,125,000 in May) and 0.5% compared to June last year (1 $156,000 to $115,000), but REINZ noted that Canterbury had the strongest annual percentage growth.
Canterbury had seen a 22.1% increase from $565,000 in June 2021 to $690,000.
The Waikato area saw a 14.3% annual increase from $735,000 to $840,000.
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Meanwhile, Wellington, Hawke’s Bay, Manawatū/Whanganui and Taranaki all plunged into negative annual price movements.
Wellington fell 4.2% from $885,000 in June 2021 to $848,000.
Hawke’s Bay was down 1.4% from $700,000 to $690,000.
The median price in Manawatū/Whanganui fell 1.1% from $581,200 to $575,000.
Taranaki saw a marginal decline of 0.2% from $576,000 to $575,000 over the same period.
“Housing affordability remains an issue for many buyers in the market. Combined with tighter lending restrictions, higher interest rates and concerns about inflation, we are seeing hesitation among buyers “, explained Baird.