REINZ house sales data mixed in February, housing market trend modest but positive

REINZ house sales continued with their decline in February that started in September 2015. In seasonally adjusted terms, house sales declined around 3% in February. Auckland and the Waikato/Bay of Plenty regions witnessed most of the decline. These regions have benefitted most from 'Auckland money' in the past. On the contrary, the stratified house price index in February was up 1.6%, with the gain shared throughout all the broad regions. On a month-on-month basis, days to sell also rebounded considerably.

Even though the February data is mixed, the rising scenario is one of a more subdued, but positive, trend in the housing market of Auckland since the property investment regulation was introduced in October 2015. Meanwhile, majority of markets in the south of Hamilton are gathering momentum.

Furthermore, in recent weeks there seem to have been an increase in valuation enquires, auction clearance and mortgage approvals. This implies that housing market is continuing to adjust to the new regulations.

RBNZ's recent monetary policy statement noted that the central bank's forecasts faced risks on the upside from a stronger than expected housing market, and that this might lean against further cuts in the OCR. The RBNZ forecasts nationwide house prices to grow 12% in 2016.