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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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