Analysts at ANZ reviewed today's NZ REINZ Housing Market Statistics.
"The bottom line
National sales volumes bounced 3.5% in January to their highest monthly total since March 2017 (seasonally adjusted). However, days to sell increased and house prices were pretty flat on the month. In short, housing market activity is well off its lows, suggesting house price inflation has likely also found a floor, but the market remains much cooler than it has been. In our view, the market is unlikely to take off again due to affordability constraints (Auckland data was mixed), credit headwinds and new Government policies.
We estimate that seasonally adjusted house sales volumes lifted 3.5% in January to be up an impressive 10.0% q/q – but only 3.2% y/y. Looking through the noise, monthly sales have clearly bounced off the bottom (up 17% from their September lows) but have a way to go before they reach recent highs (still 6% below the 2017 high, and 12% below the average experienced over 2016).
The time to sell a property nonetheless lengthened. The national median number of days to sell increased by 2.3 days (sa) to 37.2 days in January. It is below the historical average of 39.6 days, but much higher than the low of 30.8 days seen in mid-2016.
National house prices eked out a sixth straight monthly gain. Our preferred measure of house prices – the REINZ House Price Index (HPI) – posted a 0.3% m/m lift, which saw annual growth ease to 3.4% y/y from 3.7% in December.
Auckland data was mixed. We estimate Auckland sales volumes fell 1.1% m/m (sa) in January but this followed a strong lift in December and they are up 10.1% q/q. The median number of days to sell lifted by 2 days to 37.3 days (back above its historical average). Auckland house prices (HPI) were flat after five consecutive monthly lifts to be flat y/y too (+0.2%).
Ex-Auckland data was stronger. Sales volumes rose 6.4% m/m. At 6.7% y/y, price growth ex-Auckland continues to well outperform our largest city, where prices remain most out of whack with incomes."
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