New Zealand’s housing market momentum remains strong despite drop in sales volumes

New Zealand’s housing market momentum continues to be strong. Even if the sales volumes dropped in June, it is likely to be due to a lack of listed stock, rather than demand shortage, noted ANZ in a research report. The national sales volumes, in seasonally adjusted terms, fell 1.6 percent in sequential terms in June. This is the second straight decline; however, it comes after certain strong monthly gains earlier in 2016.

Most of the regions recorded strong annual turnover growth. Southland, Northland and Taranaki are leading the way in the growth stakes, recording a growth of 39 percent year-on-year, 20 percent year-on-year and 29 percent year-on-year respectively. Auckland and Waikato have recorded weaker turnover growth; however, this is off strong levels, especially for Waikato, said ANZ.

The seasonally adjusted median days to sell dropped again in June; although marginally. However, at 30 days it is at its lowest level since 2007 and quite below its historical average. The REINZ Stratified House Price Index rose 1.8 percent on sequential seasonally adjusted basis. Even if the annual growth was maintained at about 14 percent year-on-year, it is the fifth straight month of around 2 percent monthly house price growth. Price growth nationwide is currently at 25 percent pace in three-month annualized terms.

Price growth is widespread. Following a weaker data in May, prices in Auckland rose sharply by 3.8 percent month-on-month in June and 13.5 percent year-on-year. Prices in Christchurch rose 2.4 percent on monthly basis and 10 percent year-on-year.

Meanwhile, prices in Wellington rose 0.8 percent month-on-month and 19 percent year-on-year. Prices in North Island were up 2 percent month-on-month and 23 percent year-on-year. Median house prices dropped 1.1 percent on sequential basis, but the price growth was broad-based like with the Stratified measure.