National house prices record annual drop but one region sees rise - REINZ

New data has found almost every region across the country has recorded a decrease in annual house prices in May - but there is one region going against the grain.

The Real Estate Institute of New Zealand's (REINZ) May 2023 figures found nationally median prices decreased 8.2 percent year-on-year to $780,000.

But the data saw no change month-on-month in national median house prices, which is in line with previous reports that the housing market may be starting to bottom out.

In May, REINZ found annual house prices decreased in almost every region with Auckland down 10.4 percent to $995,000, down from its seven-figure highs for the third month running. Wellington fell 11.7 percent to a median price of $795,000 and Canterbury dropped 5.4 percent to $650,000.

Out of all the regions, Nelson was the only one to record a median price rise in May at  2.7 percent year-on-year and 6.9 percent month-on-month to $770,000. 

Annual median price changes.
Annual median price changes. Photo credit: REINZ

Meanwhile, two districts reached record median prices: Grey District with an 18.7 percent increase year on year ($400,000) and Waitomo District with a 53.4 percent increase year on year ($655,000). 

REINZ chief executive Jen Baird said as we head into the winter months, we are seeing glimpses of positivity, especially in the regions following the Reserve Bank's announcement of easing loan-to-value restrictions and the stabilising of interest rates.

"It's clear that current high interest rates combined with a tight economy, are still influencing the market as buyers continue to act with caution while economic headwinds play out," she said in a statement.

"This month median prices eased at a slower rate and sales counts are marginally down compared to May 2022. Seven regions increased in sales counts, an indicator of returning market confidence."

At the end of May, the total number of properties for sale across New Zealand was 26,685, up 250 properties (0.9 percent) year-on-year, and down 6.8 percent month-on-month. 

Baird said the slight increase in stock levels indicates inventory levels look as though they have stabilised. 

"We have seen low levels of property coming to market across the country for much of this year and, as sales volumes are back at more normal levels, we may be seeing the beginning of a shift in the balance of supply vs demand," Baird said.

In May, Wellington recorded its highest sale count since November 2021 and Hawke's Bay had its highest sale count since May 2022. While Marlborough, Tasman and Otago all had the highest sales count since March 2022. 

On the flip side, Gisborne, Manawatu-Whanganui and Nelson had the lowest sales counts since records began.

There were  5752 properties sold in May, down from 5776 last May but up 30 percent from April this year. Median days to sell rose to 49 days, up six days from last year, while new listings decreased from 8983 listings in May 2022 to 7359 listings in May 2023.

"We've heard from salespeople that most sellers are meeting the market while others are potentially holding tight on selling at a higher sale price, particularly if they had bought in the peak of the market. These tend to be the properties that stay on the market longer," Baird said.

"Easing of loan-to-value restrictions, commentary around peak inflation and a renewed confidence is seeing more first home buyers seek out opportunities."

The data comes as recent reports have suggested the housing market may be starting to bottom out. data found average house prices have remained flat for the past couple of months signalling New Zealand may have reached the so-called 'bottom' of this trend or, at the very least, a turning point.  

Meanwhile, CoreLogic suggested a "near-term floor for house prices" after the national house price index fell 10.3 percent in April.