New Zealand's house prices rose slightly in October compared to the previous month but were still down year-on-year, according to the latest data.
Figures from the Real Estate Institute of New Zealand (REINZ) show median prices across the country decreased 7.5 percent annually from $892,000 in October 2021 to $825,000 in the same month this year.
But prices were up 1.9 percent in October compared to the previous month when the median house price was $810,000.
Excluding Auckland, the drop was less severe, decreasing 3.4 percent from $750,500 to $725,000. Prices were also up month-on-month by 1.5 percent from $714,000 in September.
Four regions had an annual increase in median price in October 2022 with the Marlborough region reaching a record median price of $781,000 - up 20.7 percent.
The REINZ figures show Auckland's median price dropped a staggering 12.7 percent annually compared to October last year, from $1,249,000 to $1,090,000.
The region has recorded six consecutive months of annual median price decreases for the first time since August 2008 to January 2009.
Prices dropped annually across all seven districts with the North Shore dropping 18.2 percent, followed by Papakura which was down 17.3 percent.
In Wellington, the median price was down 17.2 percent annually, from $1,000,000 to $828,000 in October this year.
Wellington has recorded five consecutive months of year-on-year median price decreases - the first time since May to September 2011.
All eight Territorial Authorities (TAs) saw prices drop compared to the same time last year with South Wairarapa seeing the greatest decrease, down 33.7 percent, followed by Carterton, down 26.5 percent.
But Invercargill and the Marlborough district bucked the trend, both reaching record median prices of $485,000 and $781,000 respectively.
REINZ Chief Executive Jen Baird said several factors caused the drastic annual price drop including a strong surge of activity in October last year.
"In October 2021, increased optimism over the easing of lockdown restrictions in Auckland combined with a delay to the introduction of changes to the Credit Contracts and Consumer Finance Act (CCCFA) from October to December impacted market activity," Baird said.
"Able to transact and keen to move before tougher lending restrictions were implemented, people come to market hard and fast, contributing to a sense of urgency that is reflected in REINZ property data for October last year and is apparent in our annual comparisons."
She said comparatively this year several compounding factors have been creating uncertainty and hesitancy in the market.
"This year, several compounding factors have created uncertainty and hesitancy in the market where there was confidence and urgency last year — rising interest rates and the cost of living, tax legislation and property regulation, tightened lending criteria, and global events with macro-economic impacts.
"We see downward pressure on prices, and the pace of the market has come down. However, over the last couple of months, salespeople have observed an increase in enquiries and a noticeable increase in the number of first home buyers back in the market," she added.
Sales activity down year-on-year, some regions see monthly uptick
The number of residential property sales across New Zealand decreased annually by 34.7 percent, from 7486 in October 2021 to 4892 in the same month this year. Month-on-month, there was a decrease of 4.3 percent.
The sales count for New Zealand, excluding Auckland, decreased by 30.4 percent annually, from 4798 to 3338. Additionally, sales activity fell 2.4 percent compared to September 2022.
The regions with the greatest annual percentage decrease were:
- Tasman, which decreased 45.0 percent annually from 80 to 44
- Auckland, which decreased 42.2 percent annually from 2688 to 1554
- Southland, which decreased 40.9 percent annually from 149 to 88
- Northland, which decreased 39.1 percent annually from 184 to 112.
Baird said sales numbers were impacted by the same factors and were worse than they seemed when adjusted for seasonality.
"Month-on-month, looking at the actual numbers we see a 4.3 percent decrease in activity; however, adjusting for seasonality, we note sales are down 9.5 percent - October performed poorer than expected compared to September," she said.
"Properties continue to change hands, and people continue to make life decisions. However, buyers and vendors are acting with caution, weighing up their options.
"There are signs of more buyers returning to the market. Owner-occupiers — backed by equity — still dominate the market. But with an increase in property on the market, easing prices, and banks lending again, we see first home buyers dipping their toes in. While this is positive news, further increases in interest rates are putting a damper on buying plans in this buyer group, and we have yet to see their interest reflected in sales activity. Meanwhile, reports from salespeople across Aotearoa suggest investors continue to step back."
Value of property nationally sees marginal monthly uptick
The REINZ House Price Index (HPI) for New Zealand, which measures the changing value of residential property nationwide, showed an annual decrease of 10.9 percent from 4200 in October 2021 to 3744 - down 12.4 percent from its peak in November 2021.
New Zealand saw a 0.2 percent increase in terms of HPI month-on-month movement.
For New Zealand, excluding Auckland, the HPI decreased 8.4 percent annually - from 4242 in October 2021 to 3886 in October 2022.
Up 3.4 percent annually, Southland was the top-ranking region on the Index in October, followed by Northland (up 1.6 percent). All other regions showed negative annual movement on the Index.
Wellington had the greatest decrease - down 19.7 percent compared to the same time last year from 4332 to 3477.
Wellington ranked bottom on the HPI annual movements for 11 consecutive months, and this month showed the greatest three-month drop in HPI movement, down 4.2 percent, followed by Manawatu/Whanganui, down 3.5 percent.
Auckland had the second greatest decrease in HPI movement, with an annual decrease on the index of 14.3 percent - from 4144 to 3550.
The median days to sell was 44 in October
Across New Zealand, the median number of days to sell (DTS) a property in October was 44 — up 10 days compared to October 2021. Month-on-month, properties were on the market three days fewer.
For New Zealand, excluding Auckland, DTS increased 14 days to 44 - though down five days compared to September (49).
West Coast had the lowest DTS of all regions at 23, an annual decrease of 13 days. Manawatu/Whanganui had the highest median DTS at 54, followed closely by the Bay of Plenty at 53.
