It has long been the topic du jour in this country. Be it round the dinner table or over a coffee, New Zealanders love talking about property and the ups and downs of the market. Even as the market has dropped off from the heady boom days of 2015/2016, it seems many are unwilling to relinquish the dramatic chatter.

Recently, there have been some breathless reports that Auckland and Christchurch properties are selling, or valued, under their CVs. But here’s the thing: property markets move in cycles and New Zealand’s markets have passed their peak. While the cycles tend to be orderly, the recent peak saw spectacular growth and heated activity.

That means the downbound part of the cycle was always likely to see some drop-off in over-valued sections of the market. This appears to be happening, yet the unwind continues to be sedate. There is no price free fall, a catastrophic crash remains unlikely.

But markets around the country, particularly the main centres, are not what they were. Price growth is slow, or down, sales are falling, listings are climbing. And this is the new normal, this is what New Zealand’s market is settling into.

Listings On The Rise

The latest round of data did reveal one notable new trend. Despite the flat-lining market, listings have remained stubbornly low. It seems that is now changing. Both Realestate.co.nz and Barfoot & Thompson’s September data record significant increases in listings while QV’s commentary noted it.

Realestate.co.nz’s data shows that nationally, there were 10,372 new property listings in September. This is an increase of 11.7% on September last year and, apart from 2015, the highest number the website has seen in a September month since 2009.

Auckland led the way with 3,896 new property listings in September. This was up by nearly a third (31.9%) as compared to September 2017. But three other regions were also in double digit new listing growth territory. They were Southland (up 21.2%), Wellington (up 13.5%) and Northland (up 13.7%).

In line with the national increase in new listings, the total number of properties on the market in September was up by 5.2% to 22,847, as compared to September 2017.

This tale is echoed by Barfoot & Thompson’s September data on There are listings aplenty in Auckland, with 3,896 new properties listied in September. the Auckland market. It shows the number of properties for sale at month’s end was at the highest in four months. Further, the 4,515 total was up 17.9% on September last year and there hasn’t been a higher available listings total in a September in seven years.

Part of this was a major increase in new listings: Barfoot & Thompson had 1,709 new listings in September – which is the second highest ever for a September. It was also up by 28.8% on August’s new listings total of 1,331 and by 20.9% on September 2017’s total of 1,414.

But while listings are on the rise, sales activity isn’t. Sales volumes nationwide were down to new lows, according to the latest REINZ data which reveals that September saw the lowest number of properties sold since January.

The number of properties sold across the country fell from 5,674 in September 2017 to 5,506 in September this year. Not only was this a year-on-year decrease of 3.0% but it is the lowest sales volume for the month of September since September 2011. Around the country 12 out of 16 regions saw a fall in volumes with six of those regions experiencing double-digit decreases.

In Auckland, the number of properties sold was down by 2.1% from 1,651 in September 2017 to 1,616 in September 2018. Likewise, Barfoot & Thompson has September sales at very modest levels, although up by 9.7% on September last year.

REINZ chief executive Bindi Norwell put the decline in sales down to the low number of listings in July. “However, August and September’s listing numbers were up by 0.1% and 11.7% respectively, so it is expected that October and November’s sales volumes will be much stronger.”

Prices Stay Steady

While sales volumes may have been down in many parts of the country, the REINZ data shows the reverse was true from a price perspective. It has 14 out of 16 regions experiencing an increase in median prices as compared to September 2017.

Further, of those 14 regions, four achieved record median prices. They were Gisborne (up 26.9% to $342,500), Nelson (up 23.1% to $592,000), Manawatu/Whanganui (18.9% to $321,000), and Northland (up 12.2% to $505,000).

Nationally, median house prices across New Zealand increased by 5.9% year-on-year to $556,000 in September 2018, as compared to $525,000 in September 2017. But Auckland’s housing market continued in a now predictably stable pattern, with a median price of $850,000 the exact same price as September last year.

Norwell says that with population growth and demand for properties continuing to exceed the supply of housing stock, prices are likely to continue increasing in the short to medium term.

‘The competitive pressures in the mortgage lending market and further cuts to interest rates by some banks in the past days and weeks simply add to that benign outlook’ KELVIN DAVIDSON

Realestate.co.nz also has the national average asking price up by 4.8% in September to a record high of $690,733, as compared to August. Additionally, average asking prices were up in 11 regions – including Auckland – and six of those regions hit all-time highs. They were Central Otago/Lakes, Otago, Wellington, Canterbury and Hawke’s Bay.

The latest QV House Price Index tells a slightly different story. It reveals that nationwide values fell by 0.6% in the three months to September, leaving the average national value at $676,427.

But this was actually an improvement on the rate of growth seen in the three months to August. Further, national value growth continued its slow, steady annual increase. When adjusted for inflation, they were up by 3.1% as compared to September 2017.

QV general manager David Nagel says the arrival of spring hasn’t had a dramatic impact on market values so far. “While listings have increased significantly across most areas, quarterly value growth remains modest due to a lack of new market drivers. Supply has been constrained which, on top of stable interest rates, is keeping values at their current levels.”

Value growth in Auckland dropped and flat-lined in Christchurch. Even Wellington’s value growth rate levelled off slightly, but the region’s values still rose by 1.6% over the past three months and by 9.6% year-on-year, leaving the average value at $664,418.

The continued slowdown in the rate of value growth in the main centres continues to have a “trickle-down” effect on regional centres, Nagel says. “Many smaller provincial areas are experiencing a gradual slowdown in growth. Although regions that offer more affordable properties or exceptional lifestyle opportunities continue to see strong value growth.”

Major Change Unlikely

For commentators across the board, housing market predictions largely remain the same – although there are some questions around what the change of seasons might bring.

Nagel says the market might not appear dramatic on the surface, but there is plenty happening behind the scenes. Investors and first home buyers continue to transform the makeup of more affordable areas on the outskirts of the city centres, he says.

“Investors, in particular, are attracted to these areas due to the higher yields attainable in the likes of the Hutt Valley and Porirua. Also, population growth and affordability constraints mean there is increased demand for different types of property – particularly semidetached units and apartments in the main centres.”

With the arrival of summer, he expects to see an increase in listings and sales but the degree to which this will impact on value growth remains uncertain. “But with the current low interest rates set to remain until well into 2020, it’s hard to see any dramatic changes to values outside of the usual seasonal fluctuations.”

In CoreLogic senior research analyst Kelvin Davidson’s view, the traditional spring bounce for new property listings has begun. This means it’s no surprise that those markets with already high levels of listings (like Auckland) are experiencing softer property value growth, he says.

“But market factors suggest that the likely rise in listings over the next few months may not be any bigger than normal, which in turn should help prevent the current orderly slowdown in values from turning into something worse. The competitive pressures in the mortgage lending market and further cuts to interest rates by some banks in the past days and weeks simply add to that benign outlook”.