The Real Estate Institute of New Zealand’s (REINZ) December 2023 figures show a notable increase in sales activity, median prices lifting, lower days to sell, and a clear sense of more confidence overall (year-on-year).
REINZ chief executive Jen Baird says December showed that the trend of steady improvement in property market activity has set in thanks to interest rates stabilising, the new Government announcing more details of its plans, and the arrival of the more active months in the property cycle.
“The December figures showed a boost in activity in the market compared to a year earlier. We’ve been observing slow and steady improvement recently, and we round out 2023 with continued improvement in sales activity in the market,” Baird says.
The number of properties sold increased by 14.1% (from 4509 to 5145) year-on-year across New Zealand, compared with December 2022. Month-on-month, sales for New Zealand decreased by 20.8% (from 6493 in November 2023 to 5145 in December 2023), in keeping with the quieter levels of activity that usually happen over the holidays.
For New Zealand, excluding Auckland, the total number of properties sold reflected a similar pattern, increasing by 17.0% (from 3135 to 3667) year-on-year, and decreasing by 16.7% (from 4401 to 3667) month-on-month, as expected.
The data shows that almost every region recorded year-on-year increases in the number of properties sold in December. Tasman led the way with the strongest year on year increase in properties sold (+47.8%), followed by Gisborne (+35.7%) and Northland (+31.3%). Taranaki was the only region to see a decrease in the number of properties sold year-on-year (-8.0%).
Median sale prices were mixed for December, with fewer than half of the regions increasing month-on-month. Nelson and Taranaki stood out, with Nelson’s median price increasing by 10.5% ($650,000 to $718,500) and Taranaki increasing by 10.3% ($580,000 to $640,000) month-on-month. The other regions that increased month-on-month ranged from 1.8%-3.5% month-on-month.
Year-on-year, median prices remained steady, with the national median sale price decreasing by 0.7% year-on-year to $779,830. There was no change (0.0%) in the median price for New Zealand excluding Auckland both year-on-year and month-on-month, with the price remaining at $700,000.
Nine of the 16 regions saw an increase in their median sale price year-on-year — Tasman and West Coast had the highest increase with 5.0% year-on-year, followed by Nelson (4.1%) and Taranaki (3.2%). This is a notable change compared with November, when only one region (Canterbury) recorded a year-on-year median price increase.
“Many local agents are reporting signs of growing market confidence and activity levels now that the election is over and the new government has begun releasing details about its plans, and interest rates have stabilised,” Baird says.
“While some buyers and sellers are waiting to see what the new year holds, it’s clear that there’s a growing understanding that the bottom of the market is behind us, with annual median prices starting to lift in many regions — it’s clear more buyers and sellers feel that now’s the time to act.
“December saw a significant increase in the number of properties sold compared to last year and open home attendance numbers were strong in many areas as well, although activity slowed down as it usually does heading into the holiday period.
“In some areas, the holidays are an opportunity for out-of-towners to fall in love with a new town, with local agents in holiday hot spots like Taupo, Coromandel, Nelson and Tasman getting enquiries from visitors to the area,” Baird says.
“The number of people choosing auction as a method of sale continues to grow, with 14.0% (718) of sales via auction in December 2023 compared with 11.4% (512) of sales via auction in December 2022. The market is moving a little more quickly. The national median Days to Sell was 36 days, decreasing by two days compared to last month, and by four days year-on-year compared with December 2022.
Nationally, new listings decreased by 6.4% from 5157 to 4828 listings year-on-year. New Zealand excluding Auckland new listings decreased by 4.0% from 3581 to 3436 listings year-on-year.
“The year-on-year decrease in listings is in contrast to the national year-on-year listings data for October and November, which saw increases in listings,” Baird says. “The December listings figure is likely to reflect some vendors taking a ‘wait and see’ approach and holding off until the new year. However, local salespeople are getting strong levels of enquiry from potential sellers, so we expect to see listing numbers across New Zealand lift early in the next few months.”
At the end of December, the total number of properties available for sale across New Zealand was 24,867, down 4.6% (1190 properties) from 26,057 year-on-year, and down 11.2% (3148 properties) from 28,014 month-on-month.
For New Zealand excluding Auckland, inventory also decreased, down by 2.6% (418 properties) from 16,349 year-on-year, and down by 10.0% (1761 properties) from 17,692 month-on-month.
“While there is some regional variation, it’s clear that property ended the year on a positive note. As well as the lift in year-on-year measures such as sales and drop in Days to Sell, the Housing Price Index is 0.5% higher compared with a year ago, and that provides a clear signal that the market is moving into more positive territory.”
In aggregate, 2023 was a slightly busier year in real estate, compared to 2022. Across the year we saw a total of 63,361 sales made, up 0.6% from 2022, 91,231 properties were listed for sale, down 12.1% on 2022.
“Looking ahead, although interest rates and other economic factors continue to influence the market, many buyers and sellers are increasingly positive. There are higher levels of enquiry from potential buyers and sellers across the country, which will boost market activity further through summer,” Baird says.
“These factors, combined with the drop in the number of listings, are expected to boost demand, along with the potential return of investors to the market as the government moves to change regulation impacting that sector.
“All up, we anticipate that activity will continue to pick up as the new year gets underway.”
The HPI for New Zealand stood at 3647 in December 2023, showing a 1.1% decrease compared to the previous month. However, when compared to the same period last year, the HPI reflects a 0.5% increase.
The average annual growth in the New Zealand HPI over the past five years has been 5.9% per annum. It remains 14.7% below the peak of the market, reached in 2021.
