NZ: REINZ housing data stable, for now - ANZ

On a number of metrics, New Zealand’s national housing market activity remained soft in October as the level of sales volumes is historically low, days to sell is ticking higher, and house price growth flat-lined, explains Phil Borkin, Senior Economist at ANZ.

Key Quotes

“It was a case of movements in the month being relatively small and not indicative of any dramatic further slowing in market activity post-election. One thing we will be keeping a close eye on going forward though is market listings, as anecdote suggests these are set to lift off low levels, which could change the dynamics for price growth. Further price weakness would obviously accentuate the risks of broader housing market spill-overs to confidence and spending.”

“Key Results

• Seasonally adjusted sales volumes lifted modestly in October. We estimate that nationwide sales rose 2.0% m/m. However, this is only a partial bounce from September’s 7.4% m/m fall, which took turnover to the lowest level since October 2011.  
• The length of time to sell also lengthened. The national median days to sell rose by 0.6 days (sa) to 37.0 days. This is still below the three-year high reached in August, but it is still elevated compared to recent history. It was closer to 30 days when market momentum was exceptionally strong around mid-2016. 
• National house prices were broadly flat. Our preferred measure of house prices – the REINZ House Price Index (HPI) – eked out a 0.1% m/m (sa) lift. This follows a 0.7% m/m gain in September and 0.9% m/m lift in August, with three consecutive falls prior to that. The annual movement dipped to 1.6% y/y. 
• Across the regions, it was a mixed bag in the month. After falling sharply in September, Auckland sales volumes rose 4.6% m/m. Volumes fell in 8 of the remaining 13 regions, with total ex-Auckland sales volumes down 1.2% m/m in the month. 
• It was a mixed story for prices too. Auckland prices rose 0.4% m/m (sa), which is actually the third consecutive increase after falling for six months prior to that. They are still down 1.2% y/y though. Excluding Auckland, prices dipped 0.1% m/m, but remain up 6.5% y/y. The strongest growing region continues to be Hawke’s Bay (+15% y/y).”