New Zealand housing market weakens in June

New Zealand housing market softens in June. The latest REINZ house sales report indicates to a considerably weaker housing market in June. While the deceleration was mainly concentrated in Auckland, it is now spreading to a larger number of regions. Sales dropped sharply in seasonally adjusted terms, which is more than just the usual winter lull. Sales dropped in both Auckland and the remainder of the country in roughly equal measure.

The REINZ house price index dropped 1 percent in Auckland and is now a bit lower than it was one year ago. Markedly, house prices in the remainder of the nation, which had been rising at a strong rate up to now, were flat in June. They continue to rise 9 percent year-on-year; however, the deceleration in sales throughout the nation implies that some additional cooling in the rate of house price growth is on the way, noted Westpac in a research report.

There is possibility that some of the softness in the housing market is because of pre-election uncertainty that also seemed to constrain the market over much of 2014. Thus, some pickup in activity towards the end of this year cannot be ruled out. However, on trends, the projection of a weak 3 percent rise in nationwide house prices in 2017 is looking on the high side, stated Westpac.