House sales plummeted to their lowest level ever in January, excluding the 2020 Covid-19 lockdown period when market activity came to a virtual standstill.
The latest figures from the Real Estate Institute of New Zealand (REINZ) show just 2759 residential properties were sold nationally in January. That's down 27% compared to January last year.
This is believed to be the lowest sales figures for any month of the year apart from April 2020.
Even in the years immediately following the Global Financial Crisis, 2009-2011, when the housing market was in a sustained downturn, January's sales remained well above 3000.
Prices are also falling, with the national median price down 13.3% compared to January last year, while the REINZ's House Price Index was down 13.9% over the same period.
Looking ahead, the figures suggest a grim outlook for the market for the next little while at least.
The REINZ recorded 27,732 residential properties on the market at the end of January, up a huge 39.4% compared to a year earlier.
That massive increase in inventory was in spite of the number of new January listings declining by 16% compared to January last year.
Essentially there are more properties available for sale but not much is selling.
That is reflected in the average amount of time it is taking to sell properties, which stretched out to 53 days in January, up by 16 days compared to January last year, which is a huge increase.
However REINZ Chief Executive Jen Baird was hopeful that things would improve in February and March.
"Reports of more activity in the market are growing," Baird said.
"Agents in many areas are reporting more attendance at open homes, more interest online and even more multi-offer situations.
"Inventory has increased 39.4% year-on-year, now sitting at 27,732 properties which provides plenty of choice for buyers.
"Add to that prices that have eased over the last 12 months and some less bad economic news coming out recently, it seems there are more buyers active in the market.
"February and March data will tell us if they choose to act," she said.
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122 Comments
Supply up, consents up, interest rates up, builders bankruptcy up, building project cancellation up, sellers greed still up, agents looking for new work up, OCR still up, with more up coming. Add in speculators cheap debt finishing up...where you say, up a creek.
FED promises more increases until inflation is at 2%...do the math.
Exactly, the Auckland 1 million median could be breached again- downwards. With this amount for sale and the 6%+ mortgage, prices should continue to correct to a more appropriate value. Only the hope that Luxton and National will re- light the tax-free fire again is providing resistance.
@Justa comment, did you miss it?
House sales hit all-time low; Auckland prices plummet 21.7 per cent: REINZ - NZ Herald
Auckland prices are now down 21.7 per cent annually, under $1 million.
Paper becomes vapor... equity that is. Oh... a phone call from the bank...I need more equity, I have a couple of weeks. Where is my pepto pills again...?
Banks have gone on record saying they dont require customers to pay down and restore paper equity. That's simply scare mongering. It's about whether you are making payments. Of course, if you want a top up, refinance to another lender or to release a security, then it matters.
Would you trust any of the top 4 Aussie banks?
So that's it then, we are officially in crash territory with our biggest housing market. Crashes don't generally end at that point, I am expecting another 10-30%, midpoint another 15% down is most likely IMO.
Thanks SND, I had missed that, Auckland median back in the 9's.
"The median national sale price fell 13.3 per cent annually to $762,500." (Last month was $790,000)
Number of auckland rentals, down
Lower than anytime in nearly 4 years since my records began may 2019
At the moment, this means didley squat. If it did, sales volumes would be starting to rise on an approaching bottom. In November 2021, it was about capital gain, now it's about capital loss with no evidence of an approaching floor.
Mortgage rates back to 3% average, that's what I would call a green shoot!
We have all your critics gone RP? Was always going to end like this..badder than bad.
Why getting so worked up, touched a nerve
Three key words "at the moment".
Rentals are a leading indicator of the sales market. Options reduce and renters look around for alternatives
"Dad/Grandad, I need your help (aka money)"
To the contrary, its your good self that's been all worked up on the downhill ride. You've been commenting about this "leading indicator" since Nov-21 - lol! Are you about to comment on my past predictions now? You know, the insightful ones that had poor timing?
Nov-22 is more accurate RP. Most would agree the property market took an unexpected hit from the rbnz in November. Do you think that FHB are returning.
The cold hard facts
Nov 21 4901 all rentals, 1572 2 bedroom
June 22 6415 all rentals, 2067 2 bedroom
14 Feb 23 3709 all rentals, 1053 2 bedroom
Usually a couple of hundred new ones being added per day but cannot keep up
We are still in early part of housing crash 20% down is just the start, long way go before average wage earners can buy a home and as rates increase this will continue to erode purchasing power. another 25% to 35% off house prices could be seen over next couple of years and if world downturn get worse it will be a lot more, anyone over leveraged is going to have a torrid time financially.
Are you sure, in 2022 you probably claimed like future "down 30 percent" And what's your background... Snake charmer from the Congo?
HW2 I was telling you and others this downturn was coming back in 2021, you and others are just starting to wake up, you should have of seen all the signs of the massive bubble created over years but some people like yourself just don’t get it and are still thinking the bottom is just around the corner. Wake up before it to late if you are over leveraged go and see a financial advisor and stop winging as you were warned by many about housing price crash.
Up a lot, Down a bit
Most people coming around to my way of thinking, Recession, what recession
There was a significant increase in activity at the latest auctions, with interest.co.nz monitoring 187 residential property auctions around the country in the week of 4-10 February, up from 109 the previous week.
There was also a significant improvement in the auction sales rate, with sales achieved on 67 of the properties auctioned.
That gave an overall auction sales rate of 36%, compared to 25% the previous week.
Early days. Note "significant"
Make a prediction HW2. Up from here? Reached the bottom? Come on, let’s have it
So you can mock and distort what I have say. Only fools make firm predictions. Whats your predictions
You were going to open homes late 2021. Unless high end, the current prices will be cheaper now. Maybe you have finance issues but whats stopping you from going and looking
Are Reinz no longer releasing their full HPI reports to the public? I can't seem to find them...
Here you go. Around this time each month they come out for the previous month's data.
https://www.blog.reinz.co.nz/reports
https://static1.squarespace.com/static/5ce1fd700bf20400017d3a30/t/63c60…
That's last month's report.
Ah sorry for whatever reason, don't ask why, I didn't think this int.co article was off the back of the actual REINZ HPI report due this month.
I just tried, format has changed I can’t download….. but then I am on an ipad
Got it, your second link works Nzdan
Its still there, Just harder to find!
Trying to access the normal page through the "Property Reports" link in their footer no longer works. Also strange to not see the two reports in the regular format? I'm not a conspiracy theorist but....
I think that they are struggling with the redesigned website, or potentially the weather/power issues.
It looks like it should be at this link, but that it is not properly connected at this time: https://www.reinz.co.nz/libraryviewer?ResourceID=491
yeah the site seems to be shitting itself.
I managed to download a copy, and uploaded it here:
Awesome - thanks so much!
And the median price one is at https://www.reinz.co.nz/libraryviewer?ResourceID=492
It is officially time to start eating your popcorn, chomp
I'd be chowing down if I didn't have friends that bought in the pandemic, consumed with fomo.
Mortgage renewal from the 2s (which was tight enough) into the 6s.
One couple have a 900k mortgage on a 200k income and a baby. What do?
200k is well above the NZ average household. Your friends should consider themselves lucky.
Auckland median down 10% month-on-month! Did I read that correctly?!
Assuming a big drop like that is just an anomaly due to incredibly low sales volumes, this is going to mess with house price reporting for months. Next month we'll see a "rebound" and the vested interest brigade will be calling Jan-23 the bottom of the cycle.
Marginal sales always set prices, both up and down
by Beanie | 7th Jul 22, 10:08am
My friends went unconditional on their next house before even listing their old one. 2 months later it still hasn't sold. Don't be like my friends.
Update. 7 months after I posted the comment above my friends are still looking for a buyer. An early offer that was refused for being too low would be snatched with both hands now.
So they moved to the new house and have a hot potato burning them with the old place?
They are currently in their old house. Turns out the new place is no place to be in heavy rain as the neighbours section uphill likes to "drop in".
They bought the new place thinking they would be happier, but not so far. They are good people who will get thru it all though.
When ladders become snakes.
They are not keen on being loss making landlords?
So we are looking for increased transaction volumes, followed by decreasing average time on the market before we can expect a price increase.
I wonder what the 'real' decrease is in real dollars adjusted from some date in time. Inflation + nominal price decreases imply a 25-27% drop so far.
Thats just the speculative stupidity from covid. More to come.
"Housing outlook grim as sales slump to a record low and the number of homes for sale surge"
Not if you are a buyer...not grim at all. This will be seen as a good thing in the future.
Indeed. Time for popcorn.
When the house prices go back to Feb 2020 council valuations, then wake me up.
Paying anything above it is totally absurd.
Anyway NZ is getting battered by nature and it's just the start, it will keep in getting worse.
Better move to where all the immigrants came from, so i guess reverse migration will become more prominent in coming years.
Catastrophising, much? I doubt you’ll find a better life where most of our immigrants come from.
Some regions are getting pretty close. Unfortunately I only have regional HPI data back to July 2020, so i'm not sure how close.
I don't understand the reference to "HPI (Aug 2023)" in that link @Miguel
Oops the column header didn't update from last time i ran it. Fixed and reuploaded (link points to the new one now)
Thanks, makes sense.
Good one.. Thanks
When the house prices go back to Feb 2020 council valuations, then wake me up
Don't really get this comment. House prices were overvalued back in 2015. Heck, Key won the 2008 election on the premise the houses were overvalued
Feb 2020 is way too much for what they're worth
"However REINZ Chief Executive tried to build a buzz and restart FOMO"
Wow, Auckland nudging -20%
Even the author of rich dad poor dad has turned into a DGM. I have been labelled envious by many a spruiker on this website. Where have they all gone?
Listing some specuboxes, that no one can buy.
I could buy one or maybe two, however the bank will only lend so much of a current valuation. Besides which I'm in the market for a home not a shoebox
The only number I'm interested in which will say we've reached the bottom will be the rising number of sales. Until then ... crickets.
In the beginning, it was;
FOMO leads to rush purchase then it becomes FOPTM, suddenly FOSD leads to FONGO, FONS and now FOGD..
Auckland HPI down 21.6% YOY, so 23-24% down from market peak in November 2021? ( can’t access report)
Most certainly in ‘crash’ territory.
DGMs are having the final laugh.
I've been labelled a DGM I suppose, however I still have empathy for those who are in dire situations. It's a bitter sweet "I told ya so" indeed.
The oldest HPI data I pulled from REINZ (before they updated / broke their website) is to January 2019. For Auckland City: 13.8% drop required to reach Jan 19, 30% increase required to reach Nov 21.
Brave choice of image for the article there, Ed...
Oh yeah. Right, now I'm outraged at the insensitivity.
Someone should be cancelled for this!
Last national emergency = 50bps cut 2011.
Pause from rbnz this time?
Hows the nzd reacting?
But the inflation rate wasn't 3 times target in 2011.
Easy decision to follow the narrative of the fed. Inflation is persistant so rates go up.
Here in NZ people are still spending like nothing changed. (Not poor people).
Needs a minimum 75bps. Probably a few more hikes needed now.. or the rate will have to go waaay higher later.
I wouldn't be surprised if they pushed out the meeting (similarly to what they did at the Covid Delta outbreak)
Auckland Median Price vs. Peak (peak prices are mainly from NOV21, Franklin and Rodney were JAN22)
- REGION PEAK PRICE CURRENT PRICE % CHG FROM PEAK
- AUCKLAND CITY $1.54M $0.98M -36%
- FRANKLIN $1.05M $0.89M -16%
- MANUKAU $1.24M $0.94M -24%
- NORTH SHORE $1.56M $1.20M -23%
- PAPAKURA $1.17M $0.75M -36%
- RODNEY $1.35M $0.91M -33%
- WAITAKERE $1.20M $0.84M -30%
- AUCKLAND $1.30M $0.94M -28%
From the Nov-22 Financial Stability Report datasheets on Mortgage Lending in negative equity, we're certainly looking like we're going to end up near the worst case scenario. A 20% fall gives 18.3% of mortgages in negative equity, a 30% give 38% of mortgages in negative equity. Will be very interesting to see how RBNZ addresses this in upcoming MPC and FSR meetings.
TotalPercentage of Total Stock
Scenario | Value | %
Aug-22 | 6,495.8 | 1.9
10% fall | 25,101.3 | 7.3
20% fall | 62,610.1 | 18.3
30% fall | 129,628.5 | 38.0
https://www.rbnz.govt.nz/hub/publications/financial-stability-report/20…
Its ok, banks can bleed some of their record profits to prop up a few losses
Unless we're talking debt forgiveness, negative equity has serious negative effects for wider society. Look at the Irish experience post-GFC, huge numbers of people (particularly FHBs) were stuck where they were because they couldn't sell their house and make good their mortgage. They bought their first home in some crap area to try and 'get a foot on the ladder' and ended up stranded there. This has flow on impacts for employment and the wider economy when people can't relocate for better work prospects.
The only sure thing, it that Banking debt forgiveness will not happen. Yes serious negative equity is most likely, just like Ireland. Time for the banks to start making margin calls, and pulling the pin on those that cannot swim back to the surface via mortgagee sales. Remember, the bank owns your house until you discharge the morgage. You just carry the liability. Which ever bank moves first will clear its worst before things really unwind will be better off.
Which one will it be....
Auckland HPI vs. Peak (peak prices are mainly from NOV21, Franklin was DEC22 and Rodney was FEB22)
- REGION PEAK HPI CURRENT HPI % CHG FROM PEAK
- AUCKLAND CITY 4015 3088 -23%
- FRANKLIN 4901 4154 -15%
- MANUKAU 4649 3608 -22%
- NORTH SHORE 4192 3368 -20%
- PAPAKURA 4935 3847 -22%
- RODNEY 4209 3547 -16%
- WAITAKERE 4697 3668 -22%
- AUCKLAND 4272 3359 -21%
And yet the shameless OneRoof continues to spruik the market.
Our Chief Resident Spruiker, TTP, is pretty quiet these days.
Haven't seen anything of IO this year either?
I miss his insightful and intelligent commentary.
I thought IO got banned late last year. I seem to recall the prophet or somesuch was winding him/her up, and that's the last time I saw IO
That's "The Prophet", thank you. Some of his acolytes remain, awaiting his return to reveal the Third Scroll.
.
HM ...."Taking The Piss" et all, will be conjuring up some "fairy dust", that he wants to sprinkle on the NZ housing market, say early 3rd quarter, for prices to resume their "upward" trajectory ...while he will be hoping for interest rates to fall down gently, like an golden autumn leaf, from an old oak tree, on a brisk and clear day, on the shores of the beautiful Lake Hayes.
Did I just read fletchers made 92m on a turnover of 4,078m correctly?
in the biggest boom for fifty years
dont see how this doesn’t mean some big problems for the corporates
and us
much higher prices need to make up the gap…..or some big corporate failures perhaps
Wow...2% margin in a market enjoying a boom period. Is this a good result for them? Seem pretty risky to be doing that turnover in a market were prices now in free fall and most cannot qualify for lending. Did they advise any forward forecasting for the next twelve months?
You don't know how to read a financial report . EBIT was 360 million. Significant items like 150 million for the convention centre not covered by insurance due to rising costs etc. They did advise, but will give more detail tomorrow when the figures are released. Stick to property as you won't do well with shares.
If ebit was 360m then 270m for interest and tax, if net profit 90m
if interest rates double they are out the back door
whats a share in a dinosaur company that doesn’t pay a dividend worth
That's probably par for the course in an industry working off fixed pricing in a highly inflationary and disrupted environment.
I'd imagine these sorts of results won't be exclusive to construction related firms though.
Expect some areas to perform worse than others in the coming year. Napier and Coromandel are starting to look less enticing. Will places like Hamilton and Palmerston North be the safe havens from the weather?
Definitely some areas that I was considering a few months back seem like terrible options now.
Yep.
Napier was a place I was giving a little bit of thought to. Maybe not.
Hamilton could become a safe haven from the weather but not from crime.
Its a real concern for people.
Hamilton and Palmerston North. Places you only live in if you have to or are desperate or both.
I might be very wrong, but aren’t quite a few parts of Hamilton flood prone?
Hmm … …. rule no 1, don’t live by a river. I think the problems in Napier, East Cape and perhaps Coromadel is too much water in the rivers and waterways. Not sure where we should go in NZ though if we rule out coast and rivers .. Waioru?
You forgot the three nearby volcanos...
Haha, I did….. choices are getting few, especially if we are ruling out volcanos and fault lines.
I would rather bathe with my electric toaster!
The only safe affordable place in NZ is in prison!.. and that's dodgy and hard to get in and easy to get out!
It will be different between suburbs as well. Established suburbs with well built character and other quality homes will not suffer as much, new subdivisions full of cookie cutter garbage on small sections could be looking at 50% down. Overall 35-40% drop on average for the overall market.
Won’t come back either. In the 1987 share market crash everyone thought it was a one way bet, they were wrong and most have not touched shares again. The amount of money lost in this housing crash is going to make the 1987 crash look like a good year. People are going to think twice from now on.
I wonder what the difference is between share ownership and home ownership.
One has more or less immediate price discovery on the way down. The other has bluff and bluster stalling and whinging from agents and sellers on the way down...?
I live in a regional capital in the North Island. Anything over $800k is not selling unless it is exceptional. In the meantime executive homes and lifestyle blocks are coming onto the market. Some nearly new and priced up to $3.5m. Why are people trying to sell them? Have they too much debt? If so why did they borrow too much at the low rates. Who will be able to borrow enough to buy them? There has to be more mortgagee sales coming along.
In the wider tron I note many large lifestyle properties - the tennis courts, swimming pool, acres of lawn just sitting - and the owners also have a bach at the Coromandel and are never home (or weren't)!
Time have changed and such grandiose high maintenance look at me properties lack a new generation of buyers - other things matter more than being part of a superficial social set..
Why are people trying to sell them?
Based on the ones I'm seeing come to market, mostly it's because they're dead, or going into a home.
Not these properties. The houses on them are recently built and would be lived in by young families. They are big, architecturally designed in many cases and well constructed.
Auckland's our leading city alright. Wellington will be right behind.
Fantastic long may it continue.
and this too shall pass...
"However REINZ Chief Executive Jen Baird was hopeful that things would improve in February and March.
"Reports of more activity in the market are growing," Baird said."
Why Do People ask this obviously myopic Baird to comment!?
More activity / things improve just means more listings!
Always " a non answer"!
With her ...It's always fecking hot when it's actually cold!
Sure we all see thru her spin.. . But these article writers are transfixed with her/ them?. WTF are they smoking!
Comedic value perhaps ?
Maybe the increase in activity will be the increased sales from vendors accepting far more realistic (much lower) prices?
"However REINZ Chief Executive Jen Baird was hopeful that things would improve in February and March.
Jen spent 10 years as CMO for B&T and 4 years at Hamiltion City Council. Let's just say her interests are on the transaction side. Mind you, working in that swamp is not going to build any objective sense into anyone.
I mean, she has to try and pump. If she told the truth, she would be gone in an instant. Imagine if she came out and said "Look, the market is absolutely shot, its dropping daily. If you really need to sell, sell up NOW for whatever you can get, because its going to get a lot worse". The real estate agents paying her wages would be apoplectic.
Here https://www.reinz.co.nz/libraryviewer?ResourceID=492 and here https://www.reinz.co.nz/libraryviewer?ResourceID=491
REINZ has a new website, it's not great.
In Jan? Summer?
REINZ with usual Pollyanna drivel
why are the cry babies unable to accept a cyclical downturn? Because sweeties have been filed out every time they scratch a knee since 2008. Well that’s over children
So what happens to this declining market now that we will have several thousand homeless people shortly across the motu from Nothland to Hawkes Bay at least,let alone the now forgotten Auckland flood?
Interested in all the wise ones thoughts?
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