New Zealand house sales rebound in August but prices decline in sequential terms

New Zealand house sales rebounded in August following a sharp decline in July in seasonally adjusted terms. But despite the increase, sales are almost 10 percent off their peak recorded in May. House sales in August rose 9.4 percent in sequential terms, after declining 10.4 percent month-on-month in July. However, despite the increase, turnover continues to be low, with REINZ registering that a lack of inventory has been a major obstacle on sales, said ANZ in a research note.

Region wise, Auckland saw a decline of -0.8 percent in house sales; however, sales rose everywhere else. Prices in all the main centres eased in August, but increased 1 percent to 4 percent throughout New Zealand on a three month-on-three month basis.

The REINZ Stratified House Price Index dropped a seasonally adjusted 2.2 percent month-on-month. This is the first monthly decline in prices since October 2015, and follows a phenomenal run of price growth, according to ANZ. The three month average prices came in at an annualized rate of 25 percent in July. The measure of growth pace weakened in August; however, at 19 percent, it continues to be strong.

Price growth in Auckland came in around average with this measure, whereas Wellington came in the strongest of the regions with annualized three-month price growth of 27 percent. The North Island continues to be stronger than the South. Meanwhile, median house prices dropped in August by 1.9 percent month-on-month after rising by 2.4 percent in the prior month.