NZ: Housing market activity stable - ANZ

Analysts at ANZ note that New Zealand’s REINZ housing market data for May point to a housing market that is about as stable as it gets, with seasonally-adjusted sales running at about 6,500 per month since November, following their recovery from the recent trough seen in September last year.

Key Quotes

“The housing market remains tight, with time to sell a property unchanged at 37 days (sa) nationwide.”

“Annual house price inflation moderated from 3.9% to 3.8% y/y (3mma). Our preferred measure of house prices – the REINZ House Price Index (HPI) – fell 0.2% m/m in May (sa).”

“Markets outside Auckland remain tight, with days to sell below historical averages. In light of this, regional divergence is likely to continue, as housing markets outside Auckland play catch up.”

“A number of offsetting forces are at play in the housing market and are broadly balancing out, but we are watchful for changes in conditions that could tip the balance. The market is constrained by affordability constraints, credit headwinds and new Government policies, while population growth and pent-up demand are still supportive. In this environment, we expect house price inflation will continue moderating gradually.”