Is the housing market bouncing back from its low? What the latest survey figures tell us about the market at mid-year

Recent commentary suggests that favourable conditions are emerging to support the housing market, and that months of falling house prices may soon come to an end. HSBC economist Jamie Culling says some recent housing market indicators have stabilised. Population growth is likely to trigger a recovery, potentially stronger than expected, as is currently happening in Australia.

 

There are also differing views. ANZ economists said last Friday that while many commentators believe the market appears to be at or near its low, it may still lack the momentum needed to rise. In this article, we use a series of figures to present the most accurate possible picture of the housing market.

 

$780,000

 

The latest House Price Index data from the Real Estate Institute of New Zealand (REINZ), which measures house price trends without being affected by sales volumes or property types, shows that the national median house price in June was $780,000. The median house price in the Wellington region was down 25% from the market peak, while Auckland's median had fallen 22.5%.

 

0.4% growth

 

6 was the month when New Zealand's national House Price Index rose by 0.4%，ASB economists described this as “the most meaningful increase in house prices since November 2021”.

 

5629 properties

 

In the year to the end of June this year, REINZ recorded a national total of 5629 property sales, an increase of 14.6% compared with 4721 in the same period last year. CoreLogic's latest property sales report noted that annual sales growth reached 17% in June, following a year-on-year increase of 8% in May. CoreLogic chief property economist Kelvin Davidson said that rising sales for two consecutive months provided strong evidence that the housing market was bouncing back from its low. “It is worth noting that this growth is coming off a low base, but as pent-up demand to buy homes begins to emerge, we are likely to see further growth in property sales over the rest of 2023.”

 

49 days

 

REINZ data shows that the median time taken to sell a property in June was 49 days, above the long-term average of 38 days but below the average of 53 days earlier this year. Notably, only 9.8% of properties sold in June were sold at auction, down from 11.7% in the same period last year. However, the institute said auction clearance rates had recently been improving.

 

5609 properties

According to property website Realestate.co.nz, a total of 24675 properties were listed for sale in June.

 

CoreLogic's survey data shows there were 5609 new listings in the four weeks to 2 July. This was below both the 8111 recorded in the same period last year and the average of 7464 over the past five years. Davidson said new listings had remained subdued for several months because potential sellers were taking a “wait-and-see” approach, mainly because they might be unsure how long a sale would take or what market price would be most appropriate for their property.

 

New listings on property website Realestate.co.nz fell 21.2% year on year in June. Website spokesperson Vanessa Williams said this had contributed to a 6.1% annual decline in total stock. This meant the total number of homes for sale in June fell from 26271 to 24675, leaving prospective buyers with fewer choices.

 

7.35%

 

According to Reserve Bank of New Zealand data, in month 6 the standard one-year fixed mortgage rate was 7.35%, while the standard two-year rate was 7.15%.

 

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Although the Reserve Bank of New Zealand held the Official Cash Rate at 5.5% in its latest Monetary Policy Review and indicated this would be its near-term peak, it has been unable to stop mortgage rates rising at the major commercial banks. Some economists believe the Official Cash Rate (OCR) could rise again. ANZ economists said another OCR increase could put renewed upward pressure on mortgage rates later this year and weigh on the market.

 

77,800 people

 

The latest figures released by Stats NZ show that annual net migration increased by 77800 people in the year to May。

 

Strong growth in net migration has increased demand for housing. However, ASB senior economist Chris Tennent-Brown said this growth might not last, as net migrant inflows had actually fallen over the past two months.