NZ property: House prices continue to slide, Auckland and Wellington leading the charge downwards

House prices continue to slide from last year’s peak but there are expectations the market will perk in spring.

The Real Estate Institute’s (REINZ) residential market report shows the house price index, which measures the changing value of properties, fell 5.8 percent for the year ended August, compared with a 2.9 percent fall in July.

The seasonally adjusted national median price for August fell 5.9 percent from a year ago and was down 2.1 percent from July, to sit at $800,000.

House prices were still 37 percent higher than in 2019 and nearly 19 percent above their level in 2020.

The Reserve Bank’s pandemic response, which included slashing interest rates, quantitative easing and the removal of loan-to-value ratios, contributed to a rapid acceleration in house prices before they peaked in November 2021.

REINZ chief executive Jen Baird said prices fell in four of the 16 regions it monitored. Two of those were the major markets of Wellington and Auckland which affected the movement of the national median price.

Wellington and Auckland saw the greatest appreciation in house prices during the early stages of the pandemic and were now seeing the most dramatic falls, with prices down 19.3 percent and 16.3 percent from their respective peaks.

The median residential price for New Zealand excluding Auckland was unchanged on a year ago at $700,000.

Despite prices easing in pockets of the country and supply picking up as well, sales activity remained subdued, Baird said.

“These positive aspects for buyers are offset by higher mortgage rates, as rising interest rates and concern around inflation continue to put the brakes on for many potential buyers.”

However, it appeared that some buyers in the market were taking advantage of lower prices on offer.

“Some real estate agents are reporting an increase in open home attendance. And while owner occupiers remain a dominant force in the market, first home buyers are beginning to re-emerge.”

August tended to be a quieter month for the property market and she expected to see the usual spring lift in activity, she said.

National sales activity was down 18.3 percent on a year ago, with 4891 transactions.

Meanwhile, the number of properties available for sale more than doubled to 25,441 but houses were taking 18 days longer to sell at 49 days.

Baird said the country entering lockdown in August 2021 affected annual comparisons.

Seasonally adjusted annual median price changes for selected regions:

• Auckland $1.1m down 8.3 percent
• Bay of Plenty $895,000 up 6.5 percent
• Canterbury $650,000 up 4.8 percent
• Otago $680,000 down 1.5 percent
• Waikato $780,000 no change.
• Wellington $780,000 down 9.3 percent