Home market activity continued its downward trend in March, with home sales throughout the country almost 13% lower than the same time last year.
According to data from the Real Estate Institute of New Zealand (REINZ), only 6,938 home sales were recorded in March – 12.9% lower than last year and continuing a 17-month slide. Seasonally adjusted, every single region experienced a fall in sales activity in March, with Auckland leading the pack. House prices in Auckland were down by 2.9% in March, and the median number of days to sell at 42 was the highest for a March month since 2001.
Read more: Number of houses sold in February falls by 9.5% – REINZ
“At a time when sales volumes are normally very strong and total sales figures for the country are typically well over the 7,000 mark, with 6,938 sales, this was the lowest number of properties sold for the month of March since 2011,” Bindi Norwell, chief executive of REINZ, told BusinessDesk.
Wellington experienced a particularly soft March with 809 sales, down 10% month-on-month when seasonally adjusted. REINZ did point out that the capital also has the lowest level of inventory in any region, and this is likely to be a key reason for weaker sales activity.
House price appreciation also eased further, coming in at 2.3% year-on-year – the lowest rate seen since September 2011. In Otago, annual house price appreciation fell to 9% year-on-year from 12% in February. However, Taranaki and Southland stood out with a pick-up in house price increases. Annual house price appreciation in these regions were 7.2% and 16.8% respectively.
“Despite some extremely competitive mortgage rates on offer from the banks, and the high chance of an OCR (official cash rate) cut in the near future, it appears the legislative changes on the horizon and the difficulty accessing finance are now really starting to impact the housing market,” Norwell told BusinessDesk.
“Hopefully, as we gain more certainty over the coming months – particularly in relation to capital gains tax – we’ll start to see volumes pick up. However, winter is normally a quieter time of year so time will tell.”