New Zealand’s real estate turnover shrank in January as deals took longer to close and prices rose at a slower annual pace.
Real Estate Institute of New Zealand figures show there were 4,372 houses sold across the country in January, down 2.5 percent from January 2018, while the median time it took to sell was 48 days, two more days than a year earlier. That’s the longest time to sell for any month since February 2012.
REINZ chief executive Bindi Norwell said January is typically a quiet month, but this year was quieter than usual.
“Following a slow December, January has also been very quiet from a sales volume perspective with the number of properties sold across the country the lowest in 24 months,” she said in a statement.
“We’ve also had the new anti-money laundering legislation apply from 1 January, which has had a strong impact on the volume of sales as the market adjusts to the changes.”
The national REINZ house price index, which adjusts for outlier prices, rose 3.1 percent to 2,740 from a year earlier, slowing from a 3.3 percent annual increase in December.
New Zealand’s housing market has cooled over the past year as lending controls and the prospect of higher interest rates prompted banks to tighten up their credit criteria. Restrictions on foreign buyers took effect in October. House-building has also been running at a strong pace to meet the shortfall in areas such as Auckland.
Figures last month showed the fewest number of sales for a December month in seven years, although looser lending restrictions from January were seen as potentially distorting activity that month.
Today’s REINZ figures show the median sale price was $550,000, up 5.8 percent from a year earlier and down from $560,000 in December.
Auckland has been a primary driver for the national market during the past seven years as a shortage of supply coincided with an expanding population and cheap mortgage rates. The volume of houses sold in Auckland fell to 1,152 in January, down 2.8 percent from a year earlier, while the time to sell was six days longer at 51 days. The median sale price of $800,000 was 2.4 percent lower than a year earlier.
Norwell said it was too early to say whether the Auckland market had turned, given December and January are typically quiet months.
Auckland and Canterbury were the only two regions to report a decline in median sale prices in January, with Waikato, Manawatu/Whanganui, Marlborough, Otago and Southland registering records.
National inventory shrank to 24,878, 2.5 percent less than a year earlier, with the sharpest declines in Gisborne, Otago and the West Coast.
Wellington, Gisborne, Otago and Hawke’s Bay all have less than 10 weeks of inventory available, which Norwell said could push up prices in those regions.
The median sale price in Wellington rose to $562,000 in January, up 12 percent from a year earlier. Gisborne was up 21 percent at $333,000, Otago rose 6.4 percent to $475,475, and Hawke’s Bay gained 3.5 percent to $445,000.