The number of houses sold across New Zealand dropped by -12.9% year-on-year in December to 5,330 – the lowest number for the month of December in seven years, according to the latest figures from The Real Estate Institute of New Zealand (REINZ).
REINZ chief executive Bindi Norwell says that numbers typically tend to decline around the Christmas period, and this trend was seen in full effect at end of 2018.
“While December is usually a quiet month as people focus on Christmas holidays, December 2018 was extremely quiet with the lowest number of properties sold for the month of December for seven years,” Norwell said.
“Additionally, 12 out of 16 regions saw an annual decrease in the number of properties sold. However, what we’re hearing is that part of the lower sales volumes can also be attributed to some vendors’ understanding of the value of their home. A realistic approach to market value may help vendors sell their property in a more reasonable timeframe.”
Auckland, Taranaki and Wellington saw some of the largest drops in volume of sales, however some regions did see an annual increase during December. West Coast went up by +42.9%, and Tasman, Gisborne and Hawke’s Bay also saw notable increases.
According to ASB economist Kim Mundy, the overall drop in house sales is “unlikely to reflect a sharp drop in demand around New Zealand.”
“Housing data is notoriously difficult to get a good steer on over the Christmas period,” Mundy stated. “We are likely to get a clearer picture of the health of the housing market from February/March onwards.”
Mundy says some prospective buyers may also have been holding off until the Reserve Bank eased its LVR restrictions in January, reflecting a delay in purchasing activity rather than a lack of demand.
“Despite the noise, the latest REINZ data highlights a continuing dichotomy in New Zealand’s housing market,” she concluded. “The Auckland market has remained lacklustre, while regional New Zealand, house price growth is continuing at a reasonable pace. For now, however, we continue to see risks of further small price falls in Auckland as the market has shifted in favour of buyers.”