ANZ analysts note that New Zealand’s nationwide, house prices were up 1.3% m/m in August, to be up 0.6% q/q, while annual house price inflation rose to 2.1% from 1.7%.
“Consistent with recent trends, Auckland house prices underperformed the broader market in August. Auckland house prices were up 1.0% in the month, to be down 2.6% over the past year. In the rest of New Zealand (ie ex-Auckland), house price inflation rose a solid 1.4% m/m. This saw annual house price inflation pick up to 6.8% y/y from 5.9% in July.”
“While prices were solid in August, we did see house sales pull back, consistent with weak listings. We estimate seasonally adjusted house sales fell 7.5% m/m in August, more than reversing the 6.6% m/m bounce in July. Annual sales growth did increase to -0.1% y/y (3mma) from -0.4% in July.”
“The housing market tightened in August to around its historical norm.”
“The notable boost to house prices in August may reflect support from lower mortgage rates over the past year, but the reversal in sales activity supports the view that the market is unlikely to take off substantially from here. While we expect the market to remain subdued overall, there is a risk that recent drops in mortgage rates do prompt a reignition in the housing market.”