New Zealand house sales volumes fall in September

New Zealand house sales in September dropped in sequential terms, reversing the improvement seen in the prior month. Throughout the country, the activity was seen easing. National sales volumes declined 6.2 percent month-on-month in August in seasonally adjusted terms and fell 9.5 percent year-on-year.

Sales in Auckland dropped 1.6 percent sequentially, the fifth straight decline. On an annual basis, sales dropped 23 percent. Lack of inventory has been a headwind on sales; however, tightening LVR restrictions are also hurting demand, said ANZ in a research note.

Softness in sales was broad based. Out of 12 regions, 9 regions recorded decline in sales in September. At just 33 days, median days to sell continued to stay historically low. However, the increase of three days in the month is decent. This indicates that demand pressures are beginning to ease slightly. Days to sell in Auckland lifted 3 days to 35, the longest since August 2014.

The REINZ Stratified House Price Index, the preferred measure of house prices, rose a seasonally adjusted 1.3 percent month-on-month after a 2.2 percent decline in August. In July, the three-month average prices were annualising at 25 percent in July.

Wellington continues to be quite ahead of the pack, with annualized three-month price growth of 25 percent. Median house prices increased 4 percent month-on-month after declining 1.9 percent in August.