January was supposed to be the month of great expectations for the housing market but it turned out to be a month of great disappointments instead.
Sales volumes and selling prices were both lower than expected, providing what is, perhaps euphemistically, being referred to as a subdued start to 2026.
January is always a pretty rubbish month as far as housing sales go, because for the first half of the month the market is still in hibernation mode for the Christmas/New Year break.
New listings begin flooding in during the second half of the month, but by the time the listing arrangements are completed and the marketing campaigns have run their course, it's usually February before listings start turning into sales in any meaningful way.
According to the Real Estate Institute of New Zealand, January's sales were down 5.4% compared to January last year, while the REINZ House Price Index was down 0.7% over the same period.
So although January is usually a rubbish month, this January was a bit more rubbishy than last year.
What made it especially rubbishy was the fact that sales and selling prices were down while new listings and total stock levels were up. You can read more about that here.
One of the key features of the housing market last year was the high levels of stock for sale relative to the number of properties being sold.
That created a buyer's market, which in turn maintained downward pressure on prices.
Two of the key indicators of that are the number of dropouts and the size of the market overhang each month.
Dropouts are the number of properties withdrawn from sale each month, either because they have been delisted completely, or because they remain technically for sale, but are no longer being actively marketed.
Interest.co.nz estimates there were around 2400 dropouts in January, up 10% and the highest number of dropouts in the last 10 years.
The overhang is the number of properties that have been on the market for at least a month but remain unsold.
Interest.co.nz estimates there was an overhang of just over 24,000 properties in January which was also a decade high for the month of January. See the graph below for the trend over the last 10 years.
While we shouldn't read too much into the January figures, with it being such a rubbishy month and all, what these figures do suggest is the buyer's market that persisted for most of last year is continuing into 2026.
Whether that remains the case as the year progresses we will have to wait and see.
The comment stream on this article is now closed.
14 Comments
🥂
MEET THE MARKET!
NZ economy is based on consumption, underpinned by decades of massive immigration from third world countries. The three main ecomonc drivers is our ability to grow grass, attract tourist because of our weak currency and the other, and most important economic driver is our reliance on selling poorly made houses to each other at ever increasing prices. That ship has sailed.
The 40 year period of forever increasing property prices ended dead, cold, kaput in 2021.
Some idiots think this stupid merrygoround will start running again. Fools and their money, will be parted.
The real idiots are the ones who think they can definitely predict the future, whether it be DGM or spruiker.
My prediction 2 years ago is looking good - house prices flat for a long period. But it was only a guess, anyone who predicted otherwise wasn’t necessarily an idiot.
Flat prices are Dropping a lot in REAL terms.
Money is worth a lot less every year.
Interest rate required a 3% handle to cause any fomo. Did not even get close and now in a rising cycle.
Those who cannot see this sucker contining to go down, are simply blind.
The thing is that people have been predicting that for over 20 years, e.g. Bernard Hickey.
I still reckon flat from here, or maybe a slight increase but less than inflation. So yes a loss in real terms. But there is still a reasonable chance of a crash, or even an increase.
'Rubbishy' oh the eloquence, the linguistic sophistry! 😅
Gangbusters at Bayleys Auckland Central this morn.
🥂 🐎
I have an Auckland relative who recently got a 10% rateable valuation increase after appealing (all in improvement value)
A common practice to appeal the RV that has been around for some time especially amongst investors. In your appeal you state your estimate - inflate it you are thinking of selling it, if a long term hold talk it down for rates advantage. An example is 399 Marine Parade Napier which I was casually looking at for development potential. Sept 2023 RV was $810,000 and on appeal a month later it was $1,050,000 (a near 25% increase) as it was going to market and it sold for $950,000 in July 2024. This can be checked out in One Roof.
Care should be taken when considering purchasing a property - One Roof is good for property history. Get your own feel for property values by looking at a variety of properties including those recently sold and pay only scant attention to RV.
Sounds cheap for the parade
Same thing for 407 Marine Parade - RV increased on appeal after 399. However it didn’t sell after much marketing with different agents. Check it out on One Roof.
housing affordability in New Zealand is rapidly improving courtesy of falling immigration, house prices, rents, and mortgage rates
Debt speculation...burn.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.