Home Sales Surge in New Zealand as Prices Dip Slightly

New Zealand’s housing market has experienced a notable uptick in sales as more buyers engage with the market, even as median prices have slightly declined. According to the latest figures from the Real Estate Institute of New Zealand (REINZ), house sales rose by 3.1% year-on-year in September 2023, totaling 6,346 transactions. This increase occurred alongside a 1.5% drop in the national median price, which now stands at $770,000.

Regional Activity and Price Variations

The sales momentum was particularly strong outside Auckland, where transactions surged by 7.5% to 4,421. During this period, the median price in these regions decreased slightly by 0.7% to $690,000. The REINZ noted that eleven out of the sixteen regions recorded higher sales volumes compared to September 2022.

Certain regions showcased exceptional growth in sales. The West Coast saw a remarkable 56% increase, driven by owner-occupiers seeking upgrades. Other notable regions included Marlborough, which experienced a 37.1% rise, and Nelson, with a 32% increase, largely attributed to first-home buyers and renewed investor interest.

Lizzy Ryley, Chief Executive of REINZ, highlighted that ten regions defied the national trend with annual price increases. The West Coast achieved record highs, with its median price climbing by 14.6% to $447,000, while Southland saw an increase of 7.8% to $525,000. Ryley noted, “This is the first time since January that any region has reached a record median price, and the first time in more than three years that two or more regions have done so.”

Market Dynamics and Selling Trends

The overall selling environment has improved, with the national median days to sell dropping by six days to 43 days compared to the previous year. Nelson recorded the most significant improvement, decreasing its selling time by 19 days to 32 days. Conversely, the West Coast experienced longer selling times, increasing from 31 to 76 days, potentially reflecting the completion of prolonged sales.

Ryley explained, “This month’s higher sales counts contributed to a six-day reduction in the national median days to sell. Some regions bucked this trend; the West Coast and Marlborough saw longer selling times, potentially reflecting the completion of sales for properties that had been on the market for an extended period.”

Inventory levels have also increased, with a 2.3% year-on-year rise to 30,721 properties available on the market. New listings grew by 1.3% nationally, reaching 9,394, with a 1.7% increase outside Auckland.

Outlook for the Market

The renewed activity in the market is particularly evident among first-home buyers and owner-occupiers, who remain the most active participants. Ryley expressed cautious optimism, noting that the recent 50 basis point cut to the Official Cash Rate (OCR) is likely to lead to lower interest rates. This, combined with the typical spring surge in listings, may enhance market activity as the season progresses.

In September, auctions represented 14% of all national sales, with 889 homes sold under the hammer. In Auckland, auction activity was notably higher both month-on-month and year-on-year, comprising 23.6% of all sales.

As the New Zealand housing market continues to evolve, both buyers and sellers are adapting to these shifts, reflecting a dynamic landscape that is poised for further changes in the coming months.