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New Zealand's housing market recorded a slight decline in prices and sales in the past month, reflecting softer demand amid external economic pressures. Data from the Real Estate Institute of New Zealand showed a drop in both median house prices and transaction volumes compared to the previous month and the same period last year. While the Reserve Bank's decision to hold interest rates steady has offered some support, market conditions remain uneven across regions. Broader global factors, including geopolitical tensions and rising fuel costs, have continued to influence buyer sentiment and overall housing activity.
New Zealand's housing market saw a marginal decline in March, with data indicating a slight easing in demand amid global and domestic pressures. According to the Real Estate Institute of New Zealand, seasonally adjusted median house prices dropped 2.7% compared to February. On a yearly basis, prices were down by 0.2%, pointing to a relatively flat trend over the past year. Advertisement
Sales activity also weakened during the period. National home sales fell 4.1% month-on-month and declined 3.4% compared to the same time last year. The data suggests that buyer activity has slowed, influenced by a combination of economic uncertainty and rising living costs.
The institute indicated that the housing market continues to perform unevenly across different regions. Some areas have shown resilience, while others have recorded more noticeable declines, highlighting the fragmented nature of the current market cycle.
The demand environment has been affected by external factors, including geopolitical tensions linked to the Iran conflict and a sharp increase in petrol prices. These developments have added pressure on household budgets and influenced purchasing decisions.
Real Estate Institute of New Zealand Chief Executive Lizzy Ryley indicated that the decision by the Reserve Bank of New Zealand to keep the official cash rate unchanged at 2.25% has provided some level of stability to the market. However, she conveyed that uncertainty remains, particularly in the context of global economic developments.
In recent months, New Zealand's housing sector has been adjusting after a period of strong price growth during the pandemic years, followed by tightening monetary conditions. Although interest rates have now stabilised, affordability constraints and cautious buyer sentiment continue to influence market activity.
Source Reuters
5th Jun, 2025
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