House sales fall for fifth consecutive month; first-home buyers lift market share

Even though the flow of new listings also eased, the level of choice for buyers is high and this is keeping a lid on values, Cotality found.

Five months of national sales volume declines:

Last January 4898 sales; this January 4540, -7.3%Last February 7954 sales; this February 7734, -2.8%Last March 9155 sales; this March 9060, -1%Last April 7812 sales; this April 7380, -5.5%Last May 8108 sales; this May 7748, -8.3%.

The Cotality Home Value Index was flat in May, still -0.6% below a year ago.

“Of course, this is presenting favourable conditions for first home buyers, who continue to buck the wider caution being seen from other buyer groups,” Cotality said today.

Favourable buying conditions, access to KiwiSaver for at least part of the deposit and the availability of low-deposit mortgages were supportive factors for first-home buyers.

Nationally, house values are down 17% from the peak of the market earlier this decade.

Cotality’s Kelvin Davidson said the current market state was “not a collapse”. Photo / Peter Meecham

Kelvin Davidson, Cotality NZ’s chief property economist, said: “I’d sum these falls up as being notable, but it’s not a collapse – the level is still fairly normal, but certainly a more sluggish start to the year than we were anticipating.”

Liam Dann of the Herald has calculated that in inflation-adjusted terms, Auckland and Wellington house prices fell 35.5% and 40% since the market peak this decade.

New Zealand’s current property downturn, already one of the deepest in our modern history, is on its way to being the longest, Dann said.

This country is four-and-a-half years into the slump.

Herne Bay in Auckland is one of the country’s highest-priced areas. Photo / Chris Tarpey

This month, Westpac senior economist Satish Ranchhod found more than a quarter of a trillion dollars had been wiped off Auckland and Wellington housing values.

He calculated $271 billion as the reduced value in the two cities’ values since the market peak.

The $271b is calculated as the difference in the collective value of all the homes in the two cities since the peak of the market about four-and-a-half years ago to May, based on Quotable Value (QV) figures.

Our economy, by the numbers

New Zealand has 1.73 million homes48% of our assets are held in residential real estateNew Zealand real estate value: $1.67 trillionNew Zealand Superannuation and KiwiSaver: $234bTotal listed stocks: $187bCommercial property: $342bOutstanding mortgage debt: $398bTotal sales of homes in the last 12 months: 89,992Gross value of those total sales: $79.3b

Source: Cotality

Anne Gibson has been the Herald’s property editor for 26 years, written books and covered property extensively here and overseas.

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