National housing activity edges up ahead of winter
The Real Estate Institute of New Zealand (REINZ) has released figures for May, revealing a moderately more active market as the country heads into the winter season.
Sales rose year-on-year, but this was paired with a decline in median price and slower new listing volumes.
New Zealand’s median property price fell 0.9% annually to $763,000. Auckland saw a steeper drop of 3.5%, settling at $975,000. In contrast, the rest of New Zealand held steady over the year at $689,000.
Eight of the 16 regions posted annual price gains, with Southland leading at +10% ($495,000). Manawatu-Whanganui recorded the largest decline, down 5.4% to $530,000.
Sales volumes rise as interest rates stabilise
In May, the number of properties sold rose 8.9% year-on-year, from 6,579 to 7,166. Excluding Auckland, sales jumped 11.3% to 5,114. Northland led regional sales growth (+33.3%), followed by Tasman (+29.7%), Marlborough (+23.1%), and Manawatu-Whanganui (+18.7%).
New listings were up 2.9% nationwide to 9,489. However, excluding Auckland, listings dipped slightly (-0.9%) to 5,835. Inventory levels rose 5.6% year-on-year, with 34,415 properties for sale.
Buyers remain cautious despite more stock
There were 875 properties sold at auction nationally (12.2% of sales), including 434 outside Auckland (8.5%).
The longer time to sell reflects increased buyer caution, with purchasers taking their time to find suitable properties. Median days to sell rose from 44 to 47 days nationwide, and from 43 to 47 excluding Auckland.
The REINZ House Price Index (HPI) increased slightly to 3,601 – up 0.1% year-on-year but down 0.6% from April. Over five years, the HPI has grown by an average of 4.2% annually. Southland remains the strongest-performing region, topping the HPI table for 11 months.
What the economists say
Michael Gordon (pictured left), Westpac NZ senior economist, said the housing market showed softer conditions in May following signs of improved momentum in April.
“The REINZ house price index rose by 0.1% in seasonally adjusted terms in May. That came after a heftier 0.4% rise in April, which was the biggest monthly rise we’ve seen since January last year,” Gordon said.
“The Auckland market was softer, with a 0.3% fall in prices for the month; the rest of the country fared better with a 0.4% increase.”
He noted that sales dipped 5% month-on-month (seasonally adjusted), likely to be revised closer to -2%. Median days to sell increased from 44 to 46 days after three months of improvement.
“It’s possible that public holidays had a lingering impact... when Easter Monday and Anzac Day fall in the same week, this tends to be treated as an extended holiday period,” Gordon said.
“Buyer interest is clearly running high... But with a sizeable stock of unsold homes on the market, there has been limited upward pressure on prices to date.”
Yen Nguyen (pictured right), ASB economist, noted the May REINZ data reflected a subdued housing market, with house prices rising just 0.1% for the month – marking a seventh straight month of modest gains.
“Sales turnover has failed to keep up with the upward momentum in the last four months, dropping marginally by 2.4% m/m,” Nguyen said.
“Both new listings and inventory lifted again in May... the median number of days to sell a property increased again, after easing in April.”
“Among the main centres, Auckland’s house prices declined for the first time in seven months (-0.3% m/m)... Wellington’s housing market started showing emerging early signs of life, with house prices lifting by 0.6% in May after four consecutive monthly declines.”
She noted that revised April sales data now show a 1.3% monthly increase (vs -1.3% initially), while May’s slight drop marks the first decline since January.
Across the country, nine regions saw higher sales volumes; seven recorded declines. The West Coast led with a 44.2% jump, while Gisborne posted the sharpest fall (-14.7%). Auckland dropped 7.6%, and Wellington edged down 0.1%.
“The housing market, like other sectors of the NZ economy, has been slow to respond to the reduction in mortgage rates,” Nguyen said.
The ASB economist said that while mortgage rates are down around 2 percentage points since the first OCR cut in August 2024, broader challenges remain.
“Rising job insecurity and easing wage growth continue to weigh on home-seekers’ confidence... while easing population growth and a flattening rental market are dampening demand,” Nguyen said.
“Overall, we have not seen any noticeable movement in the housing market yet, though we continue to expect it will gradually recover over the course of this year.”
Access the full REINZ report via LinkedIn. For more insights, read the commentaries from Westpac and ASB.
