ANALYSIS: The latest housing market figures from the Real Estate Institute of New Zealand underscore what agents and sellers will have fast realised – spring has failed to spring.
The market usually experiences a spring lift in sales volumes and prices over September, October and November, but this year the nationwide median sales price is well down on last year and sales volumes are hitting the lows most would expect in real estate's quietest period – late December/January, when the market takes a break.
While the nationwide median price for October was a 1.9% improvement on the month before, it was, at $825,000, still down 7.5% on where it was a year ago. And nationwide sales in October were down 34.7% year-on-year – from 7486 to 4892 – and down 2.4% on September.
There were more than 1000 fewer sales in Auckland last month than there were in October 2021. Market conditions for Auckland last spring were admittedly a lot different to what they are now – you'll find no one's talking about FOMO any more, with fears about cost of living and interest rates taking over.
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Funnily enough, the spring lift in sales for Auckland was late in arriving, with sales volumes in September down on the month before, but the spectre looming over the city's housing market back then was Covid and the lockdown restrictions. After a month of uncertainty, buyers decided to jump back into the market, pushing sales volumes to just over 3100 in November and the city's median sale price to a peak of $1.3m.
It's been all downhill for Auckland since then, with its median sale price in October down $210,000 since market peak. Average monthly sales so far this spring in the city are up just 1.46% on average monthly sales over winter. The spring lift in sales for the city in 2019 was 12%, and in 2020 it was a spectacular 33%.
Clearly, a late spring surge isn't on the cards for the city, or the rest of the country, this year. The big question for the market is when will sales activity pick up? December and January are typically quiet months, and the market doesn't start to hit its stride until late February / early March. That suggests the market is facing at least four more uncomfortable months until buyers may decide to return in greater numbers – although the market should steel itself for lower sales, and by extension lower prices.
