'Dampened demand' in housing market in June amid 'volatility'

'Dampened demand' in housing market in June amid 'volatility'

Roger Pettingell Sarasota Real Estate

June saw “dampened demand” in the housing market, with the number of houses sold down and the number of days to sell up, according to the Real Estate Institute of New Zealand.

The organisation’s latest monthly report revealed the number of houses sold nationally decreased 38.1% in June – from 7629 in June 2021 to 4721.

The regions with the greatest decrease were Auckland (decreased 43.3% annually from 2853 to 1618), Bay of Plenty (decreased 41.3% annually from 458 to 269), Gisborne (decreased 39.5% annually from 43 to 26) and Taranaki (decreased 39.5% annually from 198 to 120).

REINZ said month-on-month, the number of houses sold nationally decreased by 17.3% – from 5707 in May to 4721.

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READ MORE: House prices drop 3.4% nationally in June quarter – QV data

The West Coast was the only place to have a month-on-month increase.

“We expect activity to decrease over the winter months as part of the usual annual property market cycle,” REINZ chief executive Jen Baird remarked.

She said because seasonally adjusted figures moving from May to June showed a 5.8% decrease in sales, the month-on-month drop wasn’t as stark as it appeared. Overall, however, sales activity was still below what was expected.

June also saw houses take longer to sell. The median was 44 days, up 13 from the same time last year.

READ MORE: 2022 ‘worst time’ for first-home buyers in 65 years

The number of houses sold by auction was also down. A total of 565 properties sold last month, representing 12% of overall sales. This was a fall on 26.3% in June 2021, but an increase on May’s 10.9%.

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REINZ described sales by auction as remaining “tempered”.

With the total number of houses for sale up though – an 89.5% increase from 13,869 in June 2021 to 26,271 – Baird commented stock is staying on the market for longer.

“More stock on the market, means more choice for buyers. With stock growth in some regions in triple figures, the urgency we saw 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 multiple factors at play, including a lengthier sales process as we continue to see more sales conditional upon finance or sale of a home. Further, access to finance and concerns around inflation and rising interest rates cause hesitancy amongst would-be buyers and sellers.”

Median house price now $850k

REINZ also said median house prices had increased both month-on-month and year-on-year.

The median house price nationally was now $850,000, up 1.2% on May’s $840,000. This was a 4.2% increase on June 2021’s $816,000.

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While some regions saw annual increases, others saw decreases, leading Baird to comment: “We’re seeing volatility across the country as the market seeks equilibrium at a more moderate pace.”

Auckland had seen an increase of 2.8% month-on-month ($1,156,000 in June compared to $1,125,00 in May) and 0.5% compared to June last year ($1,156,000 compared to $1,15000), but REINZ noted Canterbury had had the strongest annual percentage growth.

Canterbury had seen a 22.1% increase from $565,000 in June 2021 to $690,000.

The Waikato region had an annual increase of 14.3% – from $735,000 to $840,000.

READ MORE: House values in half of New Zealand’s suburbs in decline

Meanwhile, Wellington, Hawke’s Bay, Manawatū/Whanganui and Taranaki all dipped into negative annual price movements.

Wellington was down 4.2% from $885,000 in June 2021 to $848,000.

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Hawke’s Bay was down 1.4% from $700,000 to $690,000.

The median price in Manawatū/Whanganui decreased 1.1% from $581,200 to $575,000.

Taranaki saw a marginal decrease of 0.2% from $576,000 to $575,000 over the same period.

“Housing affordability remains an issue for many buyers on the market. Paired with tighter lending restrictions, higher interest rates and concerns over inflation, we are seeing hesitancy amongst buyers,” Baird reflected.


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