Key Facts
- House sales in May showed a 9.2 percent annual increase but are still below normal levels.
- Annual sales count was 73,181, far below the typical 90,000 per year.
- Total housing stock is 16 percent higher than last year and 28 percent above the five-year average.
- First home buyers account for 25 percent of purchases, aided by lower prices and KiwiSaver.
- Relocating owner-occupiers account for 26 percent of purchases, indicating a minor resurgence.
- High mortgage rates and policy changes have marginal impact on market recovery.
- The recovery seen in early 2023 has slowed due to affordability pressures and high mortgage rates.
Article Summary
CoreLogic’s June Housing Chart Pack indicates a steady increase in sales volumes in the housing market, but levels are still below historical norms. The modest increase in sales activity, recorded for the 13th consecutive month in May, resulted in 6,789 transactions. Despite this, annual sales remain significantly subdued at 73,181, compared to the usual 90,000 transactions per year.
The market has seen an increase in overall inventory, attributed to a rise in new listings. This trend places buyers in a favorable position for negotiating prices. As of now, the total housing stock is 16 percent more than last year and 28 percent above the five-year average. The influx of listings appears to be driven by previously pent-up reluctance to list properties, which is now being released.
First home buyers make up a quarter of the market, supported by lower house prices, lower competition, and access to low-deposit finance. Relocating owner-occupiers, making up 26 percent of the purchases, also show signs of increased activity, driven by the greater availability of listings and stabilizing market conditions.
High mortgage rates and ongoing regulation changes continue to adversely impact the market. Despite initial recovery momentum in 2023, recent months have seen a loss of momentum, reflecting enduring affordability pressures and high mortgage rates, coupled with rising unemployment and increasing listings. CoreLogic suggests that measures like tax cuts and looser LVR rules will have minimal effect in such an environment.
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