REINZ CEO comments on buyer sentiment
Property sales volumes increased by more than 30% across seven regions in May, a sign that buyers are slowly returning to the market.
REINZ chief executive Jen Baird (pictured above) said that while May was traditionally a busier month than April, the month-on-month increases were “quite substantial”.
While there were signs that of increased interest from property buyers, sellers remained cautious, as reflected in continued low numbers of new listings, she said.
According to REINZ May data released earlier this month, the number of properties sold was 5,752, up 30% month-on-month, only slightly below May 2022 (5,776).
Northland, Auckland, Waikato, Wellington, Tasman, Marlborough, and Southland had a 30% or more increase in sales volumes from April to May, REINZ data showed. Sales volumes increased most sharply in Marlborough, which experienced a 66.7% lift in sales volumes.
Sales volumes in Auckland were down 4.2% year-on-year, up 37.8% month-on-month.
Noting that data for smaller regions could be more variable due to smaller sample sizes, Baird noted that bigger cities such as Waikato (up 6.4%), Bay of Plenty (up 4.3%) and particularly Wellington (up 24.6%) were examples where there was considerable change in sales volumes.
“Taking seasonality into account, we do tend to see a busier May than we do in April (we do have a seasonal bump), but still those numbers are quite substantial,” Baird said.
National selling price stalls
The national median house price experienced no change in May, remaining at $780,000, down 8.2% year-on-year, REINZ data showed.
Baird said that the data indicated an “easing” in the fall of property prices, noting that over the previous six months, annual drops had been more significant.
“The national house price was stable from April to May … we’ve started to see that month-on-month number starting to come back a little,” she said.
The Taranaki region experienced the largest annual decline in median selling price (-15.9%), followed by Bay of Plenty (-13.2%), Tasman (-12.9%) and Manawatu/Whanganui (-12.4%).
Auckland continued to hold court in the $1m price-range, the median selling price in the super city reaching $995,000 in May, down 10.4% year-on-year, followed by Wellington at $795,000 (down 11.7%). The median selling price in Canterbury was $650,000 (down 5.4%).
While the median selling price in Auckland was lower year-on-year, month-on-month, the median selling price increased by half a percentage point. Removing Auckland data, the national median house price was down 6.5% year-on-year.
First home buyers continue to be active
Baird said that the May REINZ & Tony Alexander real estate survey, along with feedback from real estate agents, showed that owner-occupiers dominated market activity for some time, with more first home buyer activity within the last three months.
According to Reserve Bank of New Zealand new residential mortgage lending figures, first home buyer lending tipped $1bn in April, slightly below $1.2bn in March but higher than in January and February.
With market commentators expecting the peak in the interest rate cycle to be close, Baird said that an increasing number of entry level buyers were looking at whether they could manage the current level of interest rates, keeping in mind that they would likely decrease the next year or so.
“Some of those prices are looking really attractive now for people, [therefore] a lot more first home buyers are in the market,” Baird said.
Seller caution reflected in low listings
The national inventory level (homes remaining on the market at the end of May) was 26,685, up 0.9% year-on-year and down 6.8% month-on-month.
Commenting on inventory levels being down month-on-month and up slightly year-on-year, Baird said that while the volume of property sold over the last year was lower than in previous years, low levels of new listings was a consistent theme for 2023.
There were 7,359 new listings in May, down 18.1% year-on-year, an increase of 3% from April to May.
“As well as buyers being cautious, we’ve had a year where sellers have decided to wait and see as well … we’ve had less properties coming to market,” Baird said.
Noting that the median days to sell was 49 in May, Baird said that properties staying on the market longer were causing inventory levels to stall.
“If we start to see more buyer activity, those numbers will change quite quickly because sellers are still being cautious,” she said.
