Auckland property sales hit a 9-year low! Talk of a recovery without rising sales and prices is all hype!
Low sales and high stock levels: it is too early to talk of a market recovery!
The Real Estate Institute of New Zealand (REINZ) released its June property report today. The figures show that Auckland’s sales this June were the lowest for June in 9 years.
Following the Reserve Bank of Australia’s second interest rate cut this year, the likelihood of the Reserve Bank of New Zealand cutting rates in August has increased considerably. More voices have also suggested that Auckland’s property market is about to stabilise. However, the REINZ figures have poured cold water on that view.
Source: REINZ
REINZ figures show that 1819 homes were sold in Auckland in June, down 3.2% year on year and the lowest June total since 2010.
Nationwide, 5978 homes were sold, down 3.8% year on year, making it the weakest June for sales in 5 years.
Source: REINZ
Prices flat as stock levels remain high
Auckland’s median house price was NZ$850,000, unchanged from June last year and the year before, making 3 consecutive years of flat prices. New Zealand’s median house sale price was NZ$585,000, slightly above the NZ$578,000 recorded in May and matching the record set in March.
A housing market recovery should be marked by rising sales volumes and prices, with sales usually picking up first. Prices rise when trading becomes more active and more people are buying.
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Auckland’s market is currently more of a stalemate, with neither the falling sales and prices of a bear market nor the rising sales and prices of a bull market. Sales volumes have fallen relatively sharply, while prices have generally slipped only slightly. The psychological tussle between buyers continues.
In a buyer’s market, buyers have more room to negotiate and greater bargaining power. Some sellers choose to lower their prices, while other homeowners hold off selling and wait for the market to recover. This is also a view shared by some house hunters and real estate agents: there are few good homes on the market, and many owners plan to wait until the busy summer season to list their properties!
REINZ says new residential listings fell 7.3% year on year. Fewer homes are being listed for sale, which has also affected sales volumes. Meanwhile, housing stock remains high. The total number of homes available for sale nationwide rose 4% to 23519, an increase of 914 homes from 1 year earlier.
REINZ chief executive Bindi Norwell
Wide differences between locations as homes take longer to sell
REINZ chief executive Bindi Norwell also noted that while Auckland’s regional median house price remained stable, prices varied considerably between suburbs.
In the Waitemata and Gulf area, which includes some of the most expensive suburbs, the median house price rose 16.3% compared with June last year. In Orakei, however, the median house price fell 11.9% year on year.
In Auckland, the time taken to sell a home increased from 40 days to 45 days. Nationwide, the median time to sell lengthened from 38 days in June last year to 41 days.