New Zealand posts first lift in monthly house sales in two years

NEW Zealand house sales rose from a year earlier for the first time in two years, adding to signs the nation’s property market is finding a floor.

Sales rose 7.5 per cent in May from a year earlier to 5,959, CoreLogic New Zealand (NZ) said on Thursday (Jun 22) in Wellington. That arrested a series of double-digit slumps extending back into 2021.

“It is now looking more certain that sales volumes have finally bottomed out,” said Kelvin Davidson, CoreLogic NZ’s chief property economist. “It’s probably still too early to emphatically call it a new trend, but further potentially modest increases in sales over the rest of 2023 wouldn’t be a surprise.”

Pessimism towards New Zealand’s property market has softened after the Reserve Bank last month projected the Official Cash Rate is unlikely to rise further in this cycle. An uptick in sales follows a slowdown in the pace of house-price declines, while several bank economists have predicted values may start recovering as soon as the third quarter of 2023.

“Factors such as a broad peak for mortgage rates and still-strong employment should underpin some kind of growth in sales and mortgage activity later in 2023, with prices finding a floor,” said Davidson.

Prices fell 10.2 per cent in May from a year earlier, down from 10.3 per cent in April and 10.5 per cent in March, CoreLogic said earlier this month. Higher immigration and a scarcity of homes being offered for sale provide confidence that the bottom of the market is approaching, the agency said at the time. BLOOMBERG