Buyer choice grows as inventory hits highest October level since 2014
New Zealand’s housing market lost more momentum in October. Sales fell sharply, and the usual spring lift didn’t appear. Prices held broadly steady nationally, while parts of the South Island reached new highs.
Real Estate Institute of New Zealand (REINZ) data shows 5,840 properties sold during the month, 23.5% fewer than a year earlier. Sales declined in every one of the 16 regions. The national median price eased 3.4% to $763,000. The REINZ House Price Index (HPI) was down 2.1% on the year but rose 0.1% over both the month and the quarter.
Buyers take their time
With more stock to choose from, buyers are taking longer to commit. National inventory climbed 11.4% to 37,433, its highest October level since 2014 and the 15th consecutive month of annual growth. Homes took a median 43 days to sell, two days longer than a year ago. Auctions also accounted for a smaller share of sales, at 15.1% compared with 17.0% last October.
Auckland led the slowdown. It accounted for 714 of the 1,793 fewer sales nationally, and its median price fell 7.6% to $955,000. Even so, local agents said first-home buyers were the most active group in the region, and investor interest showed tentative signs of lifting.
Rates still weighing on decisions
Interest rates remained an important influence on buyer sentiment, according to REINZ. The Official Cash Rate was held at 2.75% on 28 October, after increases in July and September. REINZ said the decision came too late to affect most sales agreed during the month.
“The OCR hold and easing inflation were welcome news, but it may take time for these signals to flow through to confidence and activity,” REINZ chief executive Lizzy Ryley (pictured) said.
However, the hold was a split 4–3 decision, with the Monetary Policy Committee agreeing that tighter policy is likely to be needed ahead of its next decision on 9 December.
Household costs and job security also influenced decisions, as did uncertainty in the lead-up to the general election.
Canterbury and Southland buck the trend
Canterbury set a record median price of $730,000, up 3.1% on the year. Christchurch City also reached a record, at $740,000. Southland’s median rose 7.9% to $530,000, and its HPI has led the country for 15 consecutive months. It was also the only region where inventory fell.
Yet sales fell across the South Island too.
“It’s a useful reminder that prices and sales activity do not always move in the same direction,” Ryley noted.
“Our members generally expect the market to remain steady in the near term,” she said, adding that agents are cautiously optimistic that activity could build before the summer holidays.
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