The winter bite is starting earlier, as the property market slows in June, with slower sales and mixed sales prices across New Zealand.
According to the Real Estate Institute of New Zealand (REINZ), the total number of properties sold in New Zealand decreased by 25.6 percent year-on-year, from 5,854 to 4,356, and by 32.6 percent compared to May 2024. Northland was the only region to see an increase in sales, up by 11.9 percent year-on-year.
REINZ Chief Executive Jen Baird noted that the property market in June is reflecting the wider economic climate in New Zealand.
"The typical winter lull, compounded by current economic conditions, has contributed to lower levels of activity in the market. This sentiment is reinforced by seasonally adjusted figures, which reveal a national sales decrease of 11.1 percent compared to May 2024."
Median prices for June were mixed, with Taranaki and Gisborne standing out with notable increases. The national median price, however, decreased by 1.3 percent year-on-year, from $780,000 to $770,000, and saw no change compared to May 2024. For New Zealand, excluding Auckland, the median price was up slightly by 0.4 percent year-on-year, from $682,500 to $685,000.
In contrast, LJ Hooker Group Head of Network NZ Campbell Dunoon, highlighted some optimism in the market despite the overall slowdown.
"Winter is typically a quieter season for the property market, but the bite has hit earlier this season as economic pressures and regulatory changes have buyers and sellers taking precautions," Dunoon said.
He noted that despite the slower market, auctions have remained a competitive avenue for property transactions. In June, 26 percent of LJ Hooker and Harveys sales were achieved through auction.
"The success of auctions in our national network shows there is still competition in the market. When property sellers meet the market and price their property appropriately, the right marketing campaign can still drive interest."
The beginning of July brought significant regulatory changes that could impact the property market, including a reduction in the bright-line rules to two years, easing loan-to-value ratio measures, and the introduction of debt-to-income ratio caps. Dunoon noted the impact of these changes on the market will be seen in the coming months, particularly for investors who may feel the pinch of interest rates.
“The comings months will reveal if there is an increase in property stock from investors, particularly from mum and dad investors who might be feeling the pinch of interest rates now the bright-line rules have changes.”
Adding to the market dynamics, the government has introduced the "Going for Housing Growth" policy, announced by Housing and Resource Management Act Reform Minister Chris Bishop on July 4. This policy aims to free up land for development and encourage growth in key urban areas.
"It is great to see new measures being introduced with the intention to increase housing opportunities in New Zealand, but there is concern as to whether the infrastructure needed will keep up," said Dunoon.
He emphasised the importance of creating communities with access to all necessary services, ensuring a high quality of life for residents.
Looking ahead, there is cautious optimism that financial pressures could ease sooner than expected. Recent comments from the Reserve Bank's Monetary Policy Committee suggest a potential softening in interest rates later this year, with Kiwi Bank anticipating a possible cut as soon as October.
"With all these policy changes and market factors to consider, the property market we are seeing at the moment is likely to be more active as we head into spring and summer.
"Despite the current conditions, there are still opportunities in this housing market. Your local real estate salesperson can help you understand how to successfully market your property or buy a home in this season."
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