New Zealand’s housing downturn has been “deep and prolonged”, and has left buyers with much more power in the market, one property research firm says. 

Both the Real Estate Institute (REINZ) and CoreLogic released data today. 

REINZ stats show sales down 27.4% in December compared to November and up 1.8% from a year earlier. 

The national median price dropped 0.6% to $775,000. 

The institute’s house price index, which smoothes out the market variations that can affect the median price, was down 1.1% year-on-year. 

“It was a relatively quiet December,” chief executive Jen Baird said. “Similar to what we’ve seen for much of the year.” 

She said many people stopped work the Friday before Christmas and that sent the property market into early hibernation, too. 

“Just the timing of the holidays meant the month was shorter than it even normally is.” 

She said buyers lacked urgency for much of 2024, and that showed through in the December numbers. 

“They shrugged their shoulders and went on holiday thinking there’ll be all the property still available in January and they were right.” 

She said the 30,000 available houses for sale gave buyers a lot of choice and that was keeping prices down. 

“Agents are telling us that sellers are seeing interest rates come down and in their heads that means prices are on their way up immediately, with lots of demand for property. But with so many on the market, that’s not the case. The buyer demand equation is not what it was a few years ago.” 

Baird said a greater sense of certainty and confidence in terms of the direction of interest rates and the economy should help this year. 

“Most people feel the worst is behind us, we’ve seen that with volumes increasing this year. My general sense is we’ll see a slow improvement in sales volumes this year.” 

Corelogic data shows prices have fallen by nearly 18% from their post-Covid peak. 

The biggest drops have been seen in Wellington and Auckland, down by around 25% and 22% respectively. At the other end of the spectrum, Christchurch is down by “only” 7%. 

“In December, the national figure edged down by another 0.2%. That was the ninth fall in the past 10 months, with those drops initially reflecting high mortgage rates, but more recently the weakness of the labour market,” property economist Kelvin Davidson said. 

He said while sales volumes had risen gently for around 18 months, they were below normal and had not significantly affected the stock of available listings on the market. 

“Total listings on the market remain elevated, up around 25% compared to the five-year average, so buyers certainly have the pricing power. 

“Main centres like Auckland, and Wellington in particular, have seen a strong rise in listings in December compared to the same time last year, which has softened price pressures in those regions for several months now. 

“It’s not great news for homeowners especially those that purchased around peak levels, but ultimately the downturn conditions are most favourable for recent buyers.” 

-RNZ