New Zealand house sales fell 1.6 percent in June from a year earlier as a cooling in activity followed the onset of winter was limited to what's considered affordable housing, pushing out the time to sell and sapping the number of available listings, says the Real Estate Insitute.
The number of houses sold fell to 6,034 in June from 6,131 a year earlier, with available listings down 3.8 percent to 22,605, Reinz said in a statement. The median time to sell took two days longer at 38 days. Still, the seasonal slowdown in activity didn't weigh on prices, with the house price index gaining 3.8 percent in June from a year earlier.
"While Jack Frost may have got his icy grip on sales volumes, he has not been able to extend this to prices as New Zealand’s median price increased by 5.7 percent year-on-year," chief executive Bindi Norwell said. "Until we solve the supply issue, house prices are likely to continue rising, particularly as the OCR remains low and the banks continue dropping interest rates."
New Zealand's housing market has been slowing as the Reserve Bank's restrictions on mortgage lending with small deposits, stiffer bank loan criteria, and efforts by central government to encourage new developments make inroads into the imbalance between supply and demand. Still, property is seen as out of reach for many New Zealanders as the rapid escalation in prices, especially in Auckland, far out-paced salary increases.
Today's data show a bigger contraction at the bottom end of the market with houses selling for less than $500,000 falling 11 percent to 2,527, and accounting for almost 42 percent of turnover, compared to 46 percent a year earlier. Sales of all other houses rose from a year earlier, with the $500,000 to $750,000 bracket up 9.3 percent to 1,773, $750,001-to-$999,999 gaining 1.3 percent to 866, and $1 million-plus house sales climbing 6.5 percent to 868.
Reinz said the drop in cheaper housing was due to the median sale price rising to $560,000 from $530,000 a year earlier.
Auckland, Tasman and Wellington are the only districts with a median sale price higher than the national figure at $850,000, $571,000 and $595,000 respectively and collectively accounted for 44 percent of all sales in the month. Auckland's 1,834 accounted for 30 percent on its own.
The decline in sales of affordable housing comes as the government's $2 billion KiwiBuild programme seeks to boost the nation's inventory of cheaper property, kicking in at $650,000 in Auckland and Queenstown and $500,000 for the rest of the country, and is eligible to single salary earners of up to $90,000 and couples earning a combined $180,000.