Median house prices declined in Auckland, Hamilton and Tauranga in February, according to the Real Estate Institute of New Zealand.
Although the price declines were small, combined with a big drop in the number of homes being sold and a rise in the volume of unsold stock on the market, the outlook for the housing market over the rest of the summer selling season looks weak.
In Auckland the median selling price was $800,000 in February, which means it has declined for four consecutive months since it peaked at $868,000 in October (see chart below). Over that period, the Auckland median is down $68,000, or 7.8%.
In Waikato/Bay of Plenty the median price was $460,000 in February compared to the peak of $470,000 it hit in November.
Compared to January, February's median price also declined in Hawke's Bay -4.4%, Manawatu/Whanganui -1.9%, Taranaki -3.1%, Nelson/Marlborough -4.3%, and Southland -3.2%.
Median prices rose in all other regions in February compared to January, led by Wellington +13.2%, Central Otago/Lakes +15.1%, and Northland +5.4%.
Nationally the median price was $495,000 in February, up slightly compared to January's median of $490,000 but down from the peak of $520,000 in November.
However a bigger concern than weak prices for the real estate industry is the bigger drop in the number of homes being sold.
Nationally 6253 homes were sold in February, down 14% compared to the 7291 sold in February last year.
In the country's largest real estate market, Auckland, 1661 homes were sold in February, also down 14% compared to a year earlier, and in Waikato/Bay of Plenty there was an even bigger decline, with 1099 homes selling in February, down 23.5% compared to February last year.
There were also substantial falls in the number of homes sold in February compared to a year earlier in Hawkes Bay -17.5%, Wellington -21.4%, Nelson/Marlborough -14.4%, Canterbury -9.5%, Central Otago/Lakes -8.6%, Otago -9.4% and Southland -22%.
The decline in the number of homes being sold and rising numbers of new listings is pushing up the total inventory of homes for sale.
The REINZ said the inventory of homes for sale in Auckland was up 20% compared to a year earlier and increased particularly sharply over the last three months.
Auctions sales had also declined, with 921 homes selling by auction in February, down 29% on February last year.
Perhaps not surprisingly, homes were taking longer to sell, with the median number of days to sell a property rising to 39 across the country compared to 36 in February last year.
In Auckland and Waikato/Bay of Plenty the median days to sell rose to 43 compared to 36 a year ago.
'A strong sense the Auckland market has peaked'
In a First Impressions note on the REINZ figures, Westpac acting chief economist Michael Gordon said prices in Auckland had effectively stalled since the middle of last year and combined with falling sales and rising inventories of unsold homes, there was a strong sense that the Auckland market had peaked.
"Mortgage rates have been heading higher since November, ending a steady downward trend over the previous couple of years," he said.
"Our view remains that higher borrowing costs will have a more meaningful and sustained impact on house prices than the temporary effects of lending restrictions."
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