New Zealand house prices rose in September. Sequentially, house prices rose 0.9 percent. On a year-on-year basis, house price inflation accelerated to 2.6 percent from 2.1 percent. On contrary to the recent trends, Auckland house price inflation kept up with the wider market in September and the Auckland market indicated more signs of activity.
House prices in Auckland rose 0.9 percent sequentially and dropped 1.7 percent year-on-year. In the remainder of New Zealand, house price inflation rose 1 percent sequentially and came in at 6.6 percent year-on-year. Prices were strong in September, but monthly house sales less so.
“We estimate seasonally adjusted house sales fell 0.6 percent m/m in September, following a 6.1 percent m/m drop in August. Sales did pick up 7 percent m/m in Auckland but fell 2.4 percent elsewhere. Annual sales growth increased to 2.7 percent y/y (3mma) from 0.9 percent”, stated ANZ.
The housing market tightened further in September to be a bit tighter than historical norms. Nationwide days to sell dropped from 40 days to 37, underpinning by a tightening in the Auckland market. Regional housing markets outside Auckland and Canterbury generally stay tight.
“Lower mortgage rates appear to have provided a boost to house prices in recent months. But, while the housing market is tight, subdued sales activity supports our view that the market is unlikely to take off substantially from here. However, it’s fair to say the outlook is highly uncertain at present. Lower mortgage rates, government policies, an uncertain migration impulse, an increasingly uncertain outlook for household incomes, and possibly upcoming LVR tweaks are all sending mixed signals”, added ANZ.
