Liz Kendall, Senior Economist at ANZ, notes that NZ house prices rose 0.4% m/m in August, having staged a mini comeback from a soft June quarter.
Key Quotes
“House price inflation has staged a mini comeback in recent months. The REINZ house price index increased 0.4% m/m in August, after rising 0.3% in July. This comes on the back of a soft June quarter. Annual house price inflation ticked up to 4.3% y/y (3mma) from 4.1%.”
“However, house sales have taken a step down in recent months. Nationwide housing market activity rose 1.3% in August, after falling 1.3% in July and 5.7% in June.”
“We estimate that seasonally adjusted sales are 2.6% higher than a year ago (3mma).”
“However, house prices in Auckland continue to fall. Auckland house prices fell 0.4% m/m in August, with a 1.7% m/m decline in sales.”
“House prices have fallen 2.5% since early in the year, which is modest relative to the rapid increases prior. But with sales having fallen 14% since early in the year and houses taking longer to sell, more weakness in prices is possible.”
“Outside of Auckland, markets remain tight. House prices rose 0.8% m/m in August to, with annual inflation ticking up to 7.5% y/y (3mma). Sales were up 2.3% m/m, more than reversing last month’s decline.”
“A number of headwinds are weighing on the housing market, including policy changes, bank prudence, and investor uncertainty.”
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