NZ House Prices Drop for Second Consecutive Month as Sellers Adjust Expectations

Date Published: 20 June 2024

Key Facts

• House prices declined for the second consecutive month in May.
• National median house price dropped to $770,000 in May.
• House prices fell by 2.9% nationally over the last three months.
• Auckland region saw a 4.2% price decline over the same period.
• Sales increased by 8.0% in May compared to April, but were down 4.9% on a seasonally adjusted basis.
• Price rises were only noted in Nelson and Invercargill, up 0.3% and 0.6% respectively.
• Papakura in South Auckland saw the biggest decline of 6.4%; Whangarei followed with a 5.3% decrease.

Article Summary

For the second month in a row, New Zealand’s housing market has experienced falling prices, with vendors seemingly becoming more realistic in their price expectations. The Real Estate Institute of NZ (REINZ) has reported that the national median house price dropped to $770,000 in May, a decline from $790,000 in April and $800,000 in March. There was also a slight annual decline of 1.3% from May last year.

The REINZ’s House Price Index, which accounts for different types of properties, indicated a broader 2.9% price decline over the past three months, with the Auckland region seeing a 4.2% decline during the same period. Notably, only Nelson and Invercargill regions witnessed modest price increases of 0.3% and 0.6%, respectively. The sharpest drops were recorded in Papakura (-6.4%) and Whangarei (-5.3%).

Interestingly, the dip in prices seems to have stimulated sales activity, as the REINZ logged 6,303 residential sales in May. This represents an 8.0% increase compared to April and a 6.8% rise from May of the previous year. However, on a seasonally adjusted basis, sales in May dipped by 4.9% compared to April, with Auckland showing an 11.9% drop, suggesting the spike in sales may not be sustainable through the winter months.

REINZ Chief Executive Jen Baird emphasized the significance of the seasonally adjusted figures as indicators of underlying market trends. She noted that the continuous influx of new properties provides ample choices for buyers, allowing them more time to make purchasing decisions.

Source Link: To read the full article, click here.