The latest Real Estate Institute data for August showed the median price for the country dropped 0.5 percent year-on-year to $761,000. Photo: RNZ/Calvin Samuel
The effect of official cash rate (OCR) cuts on the housing market could still take some time to flow through, the Real Estate Institute says.
Although the official cash rate has fallen from a peak of 5.5 percent to 3 percent, and interest rates have fallen from more than 7 percent to about 4.75 percent, it has not pushed up house prices.
The latest Real Estate Institute data for August showed the median price for the country dropped 0.5 percent year-on-year to $761,000.
"Across New Zealand, confidence in the property market is tempered with caution," chief executive Lizzy Ryley said.
"Post-OCR shifts, the REINZ data has indicated that it doesn't necessarily give the market an immediate boost. And sometimes I think that it's a couple of months later [before the effect is seen]."
The house price index, which is designed to smooth out variation caused by the mix of sales, lifted 0.4 percent year-on-year and 0.3 percent on the month before.
Over the past five years, the annualised rate of price growth for the property market was 3.2 percent a year, compared to general inflation of 4.5 percent.
Sales were down year-on-year by 3.7 percent and 11.1 percent month-on-month, to 5866 sales.
Only six regions reported an increase in sales last month compared to August last year. The most notable increases were recorded in the Waikato, up 13.2 percent to 688 sales, Gisborne, up 11.1 percent to 40 sales and Southland, up 8.1 percent to 133 sales.
"Properties are taking different lengths of time to sell depending on the area, which shows that while the market is active, buyers are considering their options carefully," Ryley said.
The number of new listings was up 9 percent and the stock of property for sale hit 30,000, up 1.4 percent on 2024.
New Zealand's median days to sell declined by two days compared to August 2024, reaching 48 days.
Ryley said the mood was cautiously optimistic for the months ahead as the impact of lower interest rates was felt more broadly.
"But it is pretty flat at the moment. We're heading into the usual seasonal factors around spring, so things could shift.
"What we are seeing is some green shoots in the regions, which is really good and of course Auckland's always the bellwether, so I think the next couple of months will be quite interesting."
She said it was positive that the market had stabilised after the post-Covid boom and subsequent price falls.
"House prices need to be quite stable for the market to pick up because obviously we want young people to feel the effects of the OCR and interest rates and start to make movements towards buying again, so it is a good thing really."
She said she had noticed since joining the Real Estate Institute that agents were enthusiastic.
"These people are really resilient and really optimistic naturally, that is what I have found over the country… They are managing their customers, helping their customers in every way that they can to make sure that people are comfortable to list their properties, comfortable with the price level that they can achieve for it."
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