Despite all the hoopla about falling mortgage interest rates, February turned out to be a pretty average month for residential real estate.
But how average was it?
There's not much point comparing it to January because that is such a nothing month for real estate.
For the first half of January the market is still sleeping off the effects of Christmas and New Year. And in the second half there's a lot of new listings and marketing activity, but most of the sales resulting from that occur in February.
So February is always a big month, and along with March forms the busiest time of the year for residential real estate.
So what about this year?
If you look at the graph below, it shows the number of sales reported by the Real Estate Institute of New Zealand (REINZ) in February each year since 2007.
This shows sales in February this year were well up on the previous two Februarys, both of which had particularly low sales.
But if you take a wider view and look at the rest of the graph, then last month's sales look a bit average. And that's because they were.
The average number of sales reported by the REINZ in every February since 2007 is 6289.
In February this year it was 6287, just two sales below the 19 year average.
So by that measure, February this year was a pretty average month. It didn't show any sign of the surge in sales some were predicting lower interest rates would bring.
So what are other measures telling us about the current state of the market?
Below the February sales graph is a table with some key indicators comparing February this year with February last year.
It shows that although sales were were up 3.5%, the total stock on the market at the end of the month was 13.6% higher. That's even though new listings received during the month were down 3.6%, and the number of properties withdrawn from sale during the month was up 14.4%.
And the median price was down 2.3%.
All of that suggests there's still a large overhang of unsold stock sitting on the market, something that tends to benefit buyers more than vendors.
So the March figures will be critical in determining how the market fares as it starts to head into the cooler month. But so far things are looking pretty average and maybe just a little bit soft.
13 Comments
Fantastic news, total stock up 13.6%, properties withdrawn unsold up 14.4%. Still seeing plenty of listings sitting for months hoping for 2021 prices, only to be withdrawn.
When vendors finally capitulate and meet the market, it could all happen at once, record inventory, record days to sell, and higher unemployment.
That REINZ sales chart (2007-2025) is very good, would be good to see one for total stock and withdrawn properties too.
The capitulation 😂
Looks like the ridiculous Covid era gains are washing out, which is good…will be interesting stuff to watch 🏠🚲
Is the specu herd getting ready to charge the exits...?
NZ2Y has risen to 3.72% from 3.65%. If there are no more rate cuts, a percentage will start looking for the exit. Right now, it’s just a small move, some hoopla, but if it gets to 4%, that will be not hoopla.
Fair call, but what is the thinking behind the “no more rate cuts”? NIR at 3% so it would be also fair to think we see three further cuts?
Kracking good news 👏
Good analysis. I think it misses the regional variation.
I think the regions are ticking over, and Auckland is oversupplied for its market.
I look at the total trademe listings as a quick weather vane. Auckland at new regional high, of around 16,000. Most significantly the "new home" listings is about 3,800, which has slowly risen from just over 3,000. So the supply of new homes is rising still. And each new home listing may represent 5 others that the developer hasn't listed individually.
Wellington also has a record number of listings. However, new homes is only a couple of hundred. So Wellington is hit by Government changes, but has less supply coming to market. It could recover faster than Auckland.
Holiday home at famous nudist beach finally finds a buyer
Agent says new RVs have had a negative impact on the Wellington housing market.
https://www.oneroof.co.nz/news/holiday-home-at-famous-nudist-beach-fina…
New RVs in Wellington have thrown a spanner in the works for some sales. In the case of Breaker Road, the RV fell from $2.1m to $1.48m.
However, the latest Wellington RVs were taken in September 2024, which meant they were already five months out of date by the time they were issued.
“It’s interesting because in the same way buyers understood the old RVs were too high in terms of market value, now they perceive them as being too low.
“They came out in February, but they’re from September 2024. So they were already five months old and based on older sales. Most of the houses that we are selling now are selling in excess of the current rateable value.”
Newell declined to disclose the sale price of Breaker Bay Road but did say it was higher than the RV. The property had initially been seeking buyer enquiry over $1.795m.
Average, flat, boring - will sum up the property market this year. Nothing to get excited about either way.
With no capital gain on the immediate horizon people start thinking about yield. If that becomes the new focus then there is still a good level of price erosion to make that stack up.
🍿
Yet some will think they can just increase rents to improve yields.
Then the tenant just moves. Got a business contact whose commercial landlord indicated a 20% increase on approaching renewal. They have signed elsewhere and are relocating. The old LL is now joining 8 pages on TM of vacancy for similar stuff, and at less money than old lease rate. Greed before brains I guess.
Seen it recently in prime Auckland office space, landlord will not contribute to a refresh so tenant moves...
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.