REINZ September Data: September Shows Slight Uptick, But Usual Spring Lift Subdued

The usual spring lift appears subdued in September, though agents report more first home buyers on the market, and increased attendance at open homes and auctions in some regions. While the median property price shows a slight increase nationally, sales activity is down and properties are staying on the market longer with median days to sell high and inventory levels elevated, according to the latest data and insights from the Real Estate Institute of New Zealand (REINZ), home of the most complete, accurate and up-to-date real estate data in New Zealand.

Across New Zealand, median prices for residential property (excluding sections) increased 2.0% annually, from $795,000 in September 2021 to $811,000 in September 2022. Month-on-month, this represents a 1.4% increase from $800,000 in August.

The median residential property price for New Zealand excluding Auckland decreased 0.7% — from $720,000 to $715,000. There was a month-on-month increase of 2.1% from $700,000 in August.

Five regions had an annual increase in median price in September 2022, one remained unchanged. The West Coast region saw the greatest annual increase in the median price – up 30.9% to $360,000.

Auckland’s median price decreased 8.3% compared to September last year, down from $1,140,000 to $1,045,000. Six of the region’s seven legacy territorial authorities (TAs) had negative annual median price movements: North Shore saw the greatest decrease down 28.6%, followed by Papakura, which was down 16.9%. Looking at the breakdown of property price brands in the North Shore, there was a marked increase in the percentage of properties sold under the million-dollar mark compared to the same time last year, which will have contributed to the decrease in median price.

In Wellington, the median price was down 3.5% annually, from $850,000 to $820,000 in September 2022. Seven of the eight TAs in the region had negative annual median price movements: South Wairarapa had the greatest decrease down 27.5%, followed by Upper Hutt down 14.5%.

Five TAs achieved record medians. More information on activity by region and TA record median prices can be found in the regional commentaries section of the Monthly Property Report.

Jen Baird, Chief Executive at REINZ, comments:

“In September, the national median property price increased 2.0% annually. Regionally, we are seeing median price movement gradually slow, with 10 of the 16 regions showing an annual decrease.

“Moving from August to September, there was a 1.4% increase in the median price. However, seven regions saw a monthly decrease. The seasonally adjusted figures show a marginal 0.2% increase nationally. Regionally, while the seasonally adjusted figures show some regions performed better than expected, others underperformed.

“Following an exceptional period of growth last year — spurred by Government stimulus and closed borders seeing Kiwis invest locally — the property market is moderating. Owner occupiers remain a strong buyer pool and agents in some areas report seeing more first home buyers in the market — enticed by easing prices and less competition. However, property prices are still unaffordable to many, particularly in larger hubs, such as Auckland and Wellington,” Baird says.

“Investors remain largely absent — new tax legislation and rising interest rates have created concern amongst this buyer pool, seeing them step back.

“Overall, buyers remained cautious in September. Increasing interest rates, tighter lending criteria, and concerns around the cost of living continue to challenge the pace of the market. In light of last week’s OCR increase of 50 basis points, bringing it to 3.5%, with further increases expected, we expect sentiment to remain cautious — despite a strong labour market.

“Agents also report seeing an increase in open home and auction attendance, which we would expect to see as we move into the warmer months. However, the September data, and reports from agents, indicate that the expected spring uplift is not as strong as anticipated,” Baird observes.

Sales activity down

Across New Zealand, the number of residential property sales decreased annually by 10.9%, from 5,548 in September 2021 to 4,943 in September 2022. Month-on-month, there was a decrease of 1.5%. Further, seasonally adjusted figures show a decrease of 2.4%, indicating September was a quieter month than usual.

The sales count for New Zealand excluding Auckland decreased 20.0% annually from 4,138 to 3,310. There was a decrease in sales activity of 5.4% compared to August 2022.

Auckland, Gisborne and West Coast all saw annual increases in sales activity — of 15.8%, 12.5% and 6.5% respectively. However, September 2021 was affected by COVID-19 lockdown and the seasonally adjusted figures show more tempered results. Auckland performed marginally better than expected — up 0.7%, while Gisborne and West Coast underperformed against what we would usually expect — down 5.5% and 18.3% respectively.

The regions with the greatest annual percentage decrease were:

• Marlborough, which decreased 37.3% annually from 67 to 42
• Manawatu/Whanganui, which decreased 28.9% annually from 311 to 221
• Southland, which decreased 28.4% annually from 155 to 111
• Taranaki, which decreased 26.0% annually from 150 to 111.

“We are operating in a different market to the one we saw last year, which was fuelled by a sense of urgency as demand outweighed supply. The market has moved the other way and the scales have tipped so that supply outweighs demand. In this market, while we are still seeing a good rate of sales, they tend to be slower.

“This is evident in the dip in sales counts compared to the same period last year — down 10.9% nationally — as well as the volume of available stock and the time properties are staying on the market.

“As the market stabilises, agents report the majority of vendors understand the need to adjust their price expectations — however, some are slow to meet buyer expectations.

“Another factor impacting the national median price is the larger number of sub-$1 million properties being sold. Eleven of the 16 regions are showing an increase in the sale of properties in this price bracket. Two largest regions, Auckland and Wellington, are most significantly affected, with an additional 8.6% and 8.9%, respectively, of properties selling in under $1 million price band this month compared to September 2021.

“Standout properties matter in this market and those that are marketed well are selling faster. While spring has gotten off to a slower than expected start, agents are confident activity will pick up over the warmer months as people move to complete their plans to buy or sell ahead of the summer holidays.”

REINZ House Price Index shows decrease

The REINZ House Price Index (HPI) for New Zealand, which measures the changing value of residential property nationwide, showed an annual decrease of 8.1% from 4,066 in September 2021 to 3,738 — down 12.6% from its peak in November 2021.

For New Zealand excluding Auckland, the HPI decreased 6.0% annually — from 4,133 in September 2021 to 3,887 in September 2022. In Auckland, the value decreased by 11.2%.

Up 5.0%, Taranaki ranked number one in terms of HPI year-on-year movement in September, followed by Southland (+1.1%) and Northland (+0.4%). All other regions showed negative annual movement on the Index.

Wellington’s HPI dropped 17.3% compared to the same time last year — from 4,200 to 3,473. This is the third largest annual drop in HPI of all regions since records began. Wellington ranked bottom on the HPI annual movements for 10 consecutive months.

Auckland had the second greatest decrease in HPI movement with an annual decrease on the index of 11.2% — from 3,977 to 3,533. The region has had the greatest drop in HPI movement over the past three months, down 4.6%. Followed by Wellington, down 4.3%.

“The HPI results indicate that, in many regions around the country, buyers are not paying as much as they were for the same type of property. For instance, what would have sold for slightly over $1 million last year might sell for just under $1 million this month. The effect is particularly pronounced in our two largest regions, Auckland and Wellington,” Baird adds.

New Zealand’s median days to sell 47 in September

Across New Zealand, the median number of days to sell (DTS) a property in September was 47 — up 10 days compared to September 2021. For New Zealand excluding Auckland, DTS increased 12 days to 49.

Taranaki had the lowest median DTS of all regions at 32, an annual decrease of nine days compared to lockdown impacted September 2021. Hawke’s Bay had the highest median DTS at 58, followed by Northland at 57.

“There has been a significant increase in the median days to sell over the past months as the market pace slowed. Ten of the 16 regions had a median DTS of 50 days or more in September, which, if you exclude lockdown affected May 2020, has not happened in a month since June 2012,” Baird notes.

Number of new listings sees uptick as we moved into spring

Nationally, listings were up 12.0% annually to 7,881 – up 5.2% compared to August 2022. New Zealand excluding Auckland saw an annual decrease of 2.3%. Nine regions saw an increase in listings compared to September 2021.

Auckland had the greatest increase in listings, up 56.8% compared to lockdown affected September 2021. It is worth noting that Auckland was in lockdown Level 4 for three weeks in September 2021, which is reflected in these numbers. Two other regions saw increases in listings of more than 20%: Northland at 33.5% and West Coast at 51.0%.

Gisborne had the greatest annual decrease in listings — down 41.0%.

At the end of September, the total number of properties available for sale across New Zealand was 25,903 — an annual increase of 93.2%, from 13,407 in September 2021. For New Zealand excluding Auckland, it was 15,744 – an annual increase of 108.6%, from 7,548.

Southland and Gisborne were the only regions to see inventory levels increase annually by less than 50% — up 35.2% and 37.2% respectively in September 2022. Four regions had over twice the inventory recorded in September last year, down from nine regions in August. Nelson and Waikato saw the greatest annual increases in inventory levels at 148.4%, followed by Bay of Plenty at 139.9%.

“Stock volumes remain elevated. Properties are staying on the market longer — the median days to sell for New Zealand was 47 in September.

“To date, we have seen people hit pause to wait for a more favourable market — whether buyers waiting for a deal, or vendors reluctant to list in fear they may be that deal. However, as we edge towards the close of the year, we expect to see the usual uptick in activity over the warmer months as vendors motivated to sell this year bring their properties to market — granting buyers yet more choice.

“People will continue to make life decisions. Property is a long-term investment, and those who purchased five, ten, twenty years ago will have made significant capital gains. Those owner occupiers, who are trading in or up, will find themselves in a good position — backed by equity.”

Inventory and listings data come from realestate.co.nz.

Sales by auction

Nationally, 11.9% of properties (586) were sold at auction in September 2022, compared to 21.6% in 2021. New Zealand excluding Auckland saw 9.4% of properties (311) sell by auction, compared to 18.7% the year prior.

Auctions represented 25.9% of sales (180) in Canterbury, down from 36.3% in September 2021. In Auckland, 16.8% of sales were by auction (275) — compared to 30.1% at the same time last year.

“When we look at the percentage of sales by auction over time, there has been a significant decrease. Between March and May 2022, we saw the percentage of sales by auction go from 20% to 11% – reflecting the shift in market sentiment.

“Auctions are unconditional. However, through 2022 there has been an increase in conditional sales — subject to sale, finance or other — due to factors including tighter lending criteria, interest rates, and cost of living. We have heard a heightened number of properties are passing in at auction. However, agents note these properties tend to go to post-auction negotiations.

“That said, they remain a popular and effective sales method. For vendors, auctions bring serious bidders to the room and can result in a quicker, cash sale — especially important for those upsizing, downsizing or looking for a lifestyle change. For buyers, they are a transparent way to gauge the market value of a property,” concludes Baird.

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