Liz Kendall, Senior Economist at ANZ, estimates that New Zealand economy’s seasonally adjusted nationwide house sales increased 23% m/m in October, after falling a whopping 10.1% m/m in September.
Key Quotes
“In percentage terms, we estimate that this is the largest monthly increase since 1996. Nationwide house sales were last at these levels in early 2017.”
“Sales can be volatile on a monthly basis and more so around policy changes. September was a particularly weak month, so we expected some payback, and a flurry of demand (or rushed sales) are possibly contributing, with the foreign-buyer ban having come into effect in mid-October. Some payback in November looks highly likely. In trend terms, sales are seeing more modest 1.4% m/m growth. But given recent volatility, we will need to bide some time to see where the trend settles.”
“Sales were up 20% m/m in Auckland, which has seen the housing market tighten, with days to sell falling from 41 days to 37 in the month, although this is still longer than average.”
“Price pressures are pretty stable. The REINZ house price index increased 0.4% in October. Annual house price inflation ticked down to 3.9% y/y (3mma) from 4.2%. House prices were flat in Auckland and increased 0.8% m/m (7.6% y/y) elsewhere.”
“We expect the RBNZ will be comfortable easing loan-to-value restrictions at the November FSR, but the risk of resurgence means they will do so gradually and cautiously.”
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