The housing market appears to have had a miserable end to summer with the number of sales in March slumping by 12.9% compared to March last year, according to the latest data from the Real Estate Institute of NZ.
In Auckland the situation was even worse, with sales volumes in March down 18.2% compared to March 2018.
Sales in all other parts of the country (excluding Auckland) were down 10.5% compared to March last year (see the interactive Volumes Sold chart below for the full regional and national trends in sales).
The sales figures are particularly concerning because March is traditionally the busiest month of the year for the real estate industry and the slump in sales comes at a time when mortgage interest rates remain around record lows and show no sign of increasing in the short term.
However the trend of falling sales is not a new one.
The number of national sales in March has fallen compared to the previous March every year since 2017 and has now dropped by 27% since 2016.
The all time peak for March, since interest.co.nz began collating the figures in 1992, was in 2004 when 11,292 properties were sold, compared with 6938 in March this year.
The slump in sales at a time when mortgage rates are low and there is considerable unsatisfied demand for housing from first home buyers, suggests affordability continues to be a major issue weighing on the market.
The ongoing decline in sales is affecting prices in the country's biggest real estate market, with Auckland's median price in March hitting $856,000, compared to $880,000 in March last year and the all time high of $900,000 in March 2017.
That means the median price in Auckland is now down 4.9% from its peak.
However prices are firmer in the rest of the country with the national median price hitting an all time high of $585,000 in March, up 4.5% compared to March last year.
In Wellington the median price droopped back from its record high of $643,5000 in February to $620,000 in Martch which was up 5.1% compared to March last year.
In Canterbury the median price was $460,000 in March, down slightly from its peak of $465,000 set in October last year but up 2.2% compared to March last year (see the interactive Median Price chart below for the full regional and national price trends, and also the chart showing the percentage growth trends in median prices).
"At a time when sales volumes are normally very strong and total sales figures are typically well over the 7000 mark, with 6938 sales this was the lowest number of properties sold for the month of March since March 2011," REINZ chief executive Bindi Norwell said.
"Despite some extremely competitive mortgage rates on offer from the banks and the high chance of an OCR cut in the near future, it appears the legislative changes on the horizon and the difficulty accessing finance are now really starting to impact the housing market in terms of sales voilumes," she said.
"Hopefully, as we gain more certainty over the coming months, particularly in relation to CGT, we'll start to see the volumes pick up.
"However winter is normally a quieter time of year, so time will tell what happens with sales volumes going forward," she said.