House sales off to 'sluggish' start but could bounce back - CoreLogic

House sales in 2024 have had a "sluggish" start with January sales activity reaching its second lowest level in about 40 years, a new report has found.

Figures measured across agent-led and private transactions showed there was a total of 3169 sales in January, according to CoreLogic's February Housing Chart Pack.

This is up only two percent on the same month last year when levels were at 3108, which marked the slowest start to the year since 1983.

CoreLogic NZ chief property economist Kelvin Davidson said the weakness in sales highlights the variability from month to month.

"January's sluggishness in sales is a timely reminder that the housing market is still facing quite a bit of mortgage rate pressure," he said.

However, February may not follow suit.

Appearing on AM on Tuesday, Davidson said he wouldn't be surprised to see buyers become more active in February.

"I would also point out though, you do tend to see with statistics a weaker month does tend to give way to a stronger month and I think we are seeing a recovery in the property market," Davidson told co-host Melissa Chan-Green.

"I think probably January is a little bit of a blip. It wouldn't surprise me to see a bounce back in February."

Sales totals for January each year.
Sales totals for January each year. Photo credit: CoreLogic

He said mortgage rates remain a challenge for buyers with the popular one and two-year rates remaining high and looking unlikely to decrease anytime soon.

Despite this, Davidson said there is still clearly a gradual upturn underway, as sales volumes have risen compared to a year earlier in each of the past nine months.

On a 12-month basis, national sales have increased 4.5 percent to more than 67,000. This is up from the April trough of less than 62,000 annually, but still well below 'normal' levels of 90-95,000 per year.

The upwards trend is also reflected in total sales across the main centres (5.0 percent) and provincial markets (3.6 percent) over the 12 months to January.

"Arguably, listing levels have returned to some kind of normality now, so the reduced sales over the past month probably hints at some uncertainty around buyer demand, rather than a lack of choice," Davidson said.