New Zealand’s housing market cools gradually, sales volume fall in December

New Zealand’s latest housing market figures suggest that there is a gradual cooling in momentum. Seasonally adjusted national sales volumes fell in December, declining 0.9 percent sequentially, as compared with the prior month’s rise of 4 percent. On a year-on-year basis, sales volume dropped 11.3 percent in December, as compared to the drop of 5.6 percent in November.

While there has been slight monthly volatility, this continues a cooling trend seen since around April 2016, noted ANZ in a research report. The three-month average turnover is expected to have dropped to its lowest level since the end of 2014, stated ANZ. The median time to sell rose slightly higher by 0.3 days to 34.3 days. Even if it is not its recent high of 34.6 days witnessed in October, it is still up from its mid-2016 lows of close to 30 days.

The growth momentum of house prices has also weakened. The REINZ Stratified House Price Index remained largely the same in December. While this is the fourth straight monthly rise, and the annual growth stays elevated at 14 percent, the pace of price growth has definitely decelerated vis-à-vis mid-2016. In three-month annualized terms, prices are at just 4.3 percent, which is down from close to 25 percent in mid-2016.

Region wise, the picture came in mixed. Sales volumes in Auckland have dropped for the eighth straight month, although sales have dropped elsewhere too.

“While an ongoing housing shortage needs to be kept in mind and will support the downside, we believe prudential restrictions and recent mortgage rate increases will ensure cooler momentum persists”, added ANZ.

At 06:00 GMT the FxWirePro's Hourly Strength Index of New Zealand Dollar was highly bullish at 144.144, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -146.384. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex