NZ: Regional divergence in housing continues – ANZ

ANZ analysts point out that New Zealand’s nationwide, house prices were unchanged m/m in July, but have fallen 0.3% q/q while annual house price inflation rose to 1.7% from 1.6%.

Key Quotes

“The theme of regional divergence continues, with Auckland house prices again underperforming the broader market. Auckland house prices were flat in the month, and are down 3.3% over the past year.”

“In the rest of New Zealand (ie ex-Auckland), house price inflation rose 0.2% m/m. However, softer house price growth in recent months saw annual house price inflation dip further to 6.3% y/y. That said, price increases have been particularly strong in Southland (5.6% q/q), Manawatu-Whanganui (3.8% q/q), and Otago (2.3% q/q) over the past three months, but mixed elsewhere.”

“While prices were soft in July at the national level, we did see a boost in house sales. We estimate seasonally adjusted house sales rose 4.8% m/m in July, which bodes well for house price inflation in the months ahead (figure). Annual sales growth increased to -1.2% y/y from -4.9% in June, suggesting stabilisation in house sales in recent months.”

“All regional housing markets outside Auckland and Canterbury remain tight, consistent with the divergence in house price inflation.”