The housing market activity in the country has shown signs of improvement, as the number of sales increased by 7.5% compared to the previous year.
Core Logic reports greater sales
CoreLogic’s Housing Chart Pack revealed that there were 5959 sales in May, up from 5542 in the same period last year. This marked the first annual increase in sales since May 2021. However, the Real Estate Institute reported a slight decline of 0.4% in May, although their figures do not include private transactions.
While the sales increase is a positive indication that the downturn may be ending, it is important to note that the market is still far from its normal volume, as annual sales remain at their lowest since 1983. Despite this, the upward trend suggests that sales volumes have potentially reached their lowest point.
The number of new listings also decreased by 28% compared to the previous year, resulting in a tightening of available homes for sale. This tightening supply may exert upward pressure on house prices, although there may be a delay before any significant price changes occur.
Affordability is still a concern
It is worth noting that the housing market remains uncertain due to factors such as housing affordability issues and the possibility of debt-to-income ratio caps being introduced in the future. However, the peaking of mortgage rates and stable employment conditions could support moderate growth in sales and Auckland mortgage finance activity later in the year, providing some stability to the market.
First-home buyers should not panic about potential price increases, as any growth is expected to be modest.
The share of purchases made by first-time home buyers remains strong, while the market share of mortgaged investors is relatively low compared to historical standards. However, cash investors still account for a significant portion of purchases, indicating ongoing demand for rental properties.
Recent data from the Real Estate Institute and real estate agents’ reports also confirm the overall improvement in market activity, with increased attendance at open homes and auctions.
Source: Stuff.co.nz 22 June 2023.