National house prices continue to fall, Cyclone Gabrielle-affected regions see property market plummet - REINZ

Annual housing prices across the country have continued to decline in February but sales and listings were significantly down for regions hit hardest by recent weather events, new figures show.

Real Estate Institute of New Zealand's (REINZ) February figures show median national house prices decreased by 13.9 percent year-on-year to $762,000.

Auckland's annual house prices fell 15.2 percent, Wellington's fell 20.6 percent and Canterbury's dropped 6.9 percent.

Marlborough was the only region to record an annual increase in February of 4.5 percent.

Whilst prices continue to ease annually, most regions saw an increase in median prices month-on-month, which is usual for February.

The only regions to have a decrease in month-to-month house prices were Tairāwhiti (down 14.8 percent), Taranaki (down 9.1 percent) and West Coast (down 17.4 percent).

When it comes to selling a home, REINZ figures also show the difficulty homeowners are having in the current market conditions, especially for regions hit hardest by recent weather events.

"February traditionally shows a reasonable month of activity but the impact of extreme and devastating weather over the start of 2023 is certainly showing in the data with sales and listings significantly down in affected areas," REINZ Chief Executive Jen Baird said in a statement.

"We may continue to see this for some time in parts of Northland, Auckland, Tairāwhiti Gisborne, Hawke's Bay, Coromandel and Bay of Plenty."

Not a lot of houses were being sold in February with the sales count for New Zealand down 31.1 percent annually, and the new listings down 29.5 percent from 11,545 in February 2022 to 8143 in February 2023.

Auckland and Marlborough recorded their lowest sales count since December 1995, while many other regions saw sales counts reach lows last seen just over a decade ago.

Annual median price changes for February 2023.
Annual median price changes for February 2023. Photo credit: REINZ

Meanwhile, all regions but Nelson had a decrease in year-on-year listings, 80 percent of which had listings drop by more than 15 percent annually. 

Regions that were impacted by flooding saw a significant decrease in listings with Auckland's down 36.9 percent year-on-year and Tairāwhiti's down 54.4 percent. 

However, REINZ said the decrease in listings shows a return to normal levels after historic lows. 

"Even though new listings are down as communities respond to the weather and the anticipation of economic adjustments ahead, inventory levels are now showing a return to standard levels after a few years at historically low levels," Baird said.

"When we looked at the trend over a ten-year period, we can definitely see the return to normal stock levels."

At the end of February, the total number of properties for sale across New Zealand was 29,083, up 5813 properties (25 percent) year-on-year, and up 4.9 percent from 27,732 month-on-month. 

"This means there is plenty of choice for buyers in the market today," Baird said.

However, the number of residential property sales across New Zealand eased annually by 31.1 percent from 5750 in February 2022 to 3964 in February 2023 - but month-on-month there was an increase of 40.4 percent.

Properties were also taking longer to sell with the median number of days to sell a property in February 2023 being 60 - 18 days longer than in February 2022.

"Our seasonally adjusted data shows that when compared to what is typically observed moving from the month of January to the month of February, all regions except Taranaki and Tasman had smaller gains in sales count month-on-month than what would be expected," Baird said.

"In other words, even though the sales count change from January to February looks significant, we would typically expect greater increases based on what has been observed historically.

"Rising interest rates, increased cost of living and inability to secure finance are still having an impact on buyers, but REINZ members are telling of returned activity at open homes in areas that weren’t as impacted by Cyclone Gabrielle."

The REINZ House Price Index (HPI) for New Zealand, which measures the changing value of residential property nationwide, showed an annual decrease of 14.2 percent for New Zealand. This is a small increase from last month of 0.1 percent.