NZ REINZ housing data: Just a hint of cooling - ANZ

Sharon Zollner, Senior Economist at ANZ, notes that the NZ’s house sales bounced back 9.4% in August after a sharp fall in July (sa) – with Auckland the notable exception.

Key Quotes

“Despite the lift, sales are nearly 10% off their May peak. Historically quick days to sell suggest this reflects supply shortages, rather than waning demand. House prices fell in most regions in August but continue to trend up, albeit a little more slowly. It is too early to see the impact of tighter LVR restrictions.

Key Results

• National sales volumes rebounded in August, lifting 9.4% m/m (sa). This follows falls over the prior three months and a 10.4% m/m fall in July. But despite the lift, turnover remains reasonably low (particularly as a proportion of the housing stock), with REINZ noting that a lack of inventory (-18% y/y) has been a key handbrake on sales.
• Across the regions, house sales fell in Auckland (-0.8% m/m, failing to bounce back from a 7.8% fall in July), but lifted everywhere else. Prices eased in all the main centres during the month, but are up 1-4% across the country on a 3m/3m basis (2.1% national average).
• At just 30, days to sell remain historically low. This is a clear sign that while turnover is lower, demand pressures remain strong.
• Our preferred measure of house prices – the REINZ Stratified House Price Index – fell a seasonally adjusted 2.2% m/m. This is the first monthly drop in prices since October 2015, and follows a phenomenal run of price growth. In fact, in July, three month average prices were annualising at 25%. That measure of the rate of growth did soften in August, but at 19%, remains strong.
• Auckland price growth by this measure is around average, while Wellington is the strongest of the regions, with annualised 3- month price growth of 27%. The North Island remains stronger than the South (Christchurch 16.2%, Other South Island 13.1%).
• For completeness, median house prices (which are susceptible to the composition of houses sold) fell 1.9% m/m after rising 2.4% in July.”