Analysts at ANZ noted that the national sales volumes have stabilised, down 1% m/m in February 2018 (seasonally adjusted).
"Days to sell are flat nationwide and prices are up a touch. But regional divergence continues, with Auckland softer than the rest of the country and Hawke’s Bay leading the charge. House price inflation is up 4%y/y and we expect stable price pressures from here. The market is unlikely to take off due to affordability constraints, credit headwinds and new Government policies.
We estimate that seasonally adjusted house sales are broadly stable. While they fell 1%m/m February, they are up 1.7% y/y. Looking through the noise, monthly sales have clearly bounced off the lows seen in September last year but are tracking below 2016 highs.
The time to sell a property is stable at around 37 days (sa) nationwide. The national median number of days to sell was exactly flat, off previous lows of 30.8 days reached in 2016. But days to sell are below their historical average of more than 39 days to sell (sa) – pointing to a market with some continuing slack.
National house prices increased 0.6% (sa) in February. Our preferred measure of house prices – the REINZ House Price Index (HPI) – is up 4% y/y. Looking through monthly movements, house prices are up 3.7% y/y (on a 3-month moving average basis), pointing to a stable, healthy pace of price pressures.
The Auckland market is cool. We estimate Auckland sales volumes increased 1.6% m/m (sa), to be up 3.0% y/y. However, median days to sell is now 43, indicating some slack. This level is well above average, consistent with a market that has well and truly cooled off – with affordability constraints tempering price gains. Auckland house prices (HPI) are up 0.5% m/m, increasing a fairly anaemic 0.7% y/y (3m m.a.).
The rest of the country is showing more signs of life. Sales volumes fell 1.8% m/m and are broadly stable overall. But price pressures are solid, up 0.7%m/m – reaching 6.8% y/y (3m m.a.). Hawke’s Bay region continues to lead the charge, with days to sell at 29 days, well below historical averages of 46. Prices are up a whopping 14.9% y/y (3m m.a.)."
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