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New Zealand's housing market recorded a modest increase in home prices in May, even as sales activity slowed across the country. Data from the Real Estate Institute of New Zealand (REINZ) showed that median house prices rose on a monthly and annual basis, indicating continued resilience in property values. However, elevated living costs, including higher fuel expenses, continued to affect buyer sentiment. Sales volumes declined both month-on-month and year-on-year as households remained careful with spending decisions. Political uncertainty ahead of the country's national election later this year also contributed to a more measured approach among homebuyers.
New Zealand's housing market saw a slight improvement in home prices during May, although transaction activity remained subdued as buyers continued to face affordability pressures and economic uncertainty.
According to data released by the Real Estate Institute of New Zealand (REINZ), the seasonally adjusted median house price increased by 0.5% compared to April. On an annual basis, prices were 1.3% higher, reflecting gradual growth in property values despite a softer sales environment.
While prices showed signs of stability, home sales across the country declined. National sales volumes fell 7.0% from the previous month and were nearly 10% lower than the same period last year, indicating that buyers remained selective when entering the market.
REINZ noted that housing market conditions continued to differ across regions, with some areas experiencing stronger activity than others. However, broader economic challenges continued to influence purchasing decisions nationwide.
Rising living expenses remained a key concern for households. Higher fuel costs and ongoing cost-of-living pressures affected consumer confidence and limited the willingness of many buyers to commit to property purchases. The institute noted that household budget constraints continued to play a major role in shaping market behaviour, resulting in a more cautious and selective approach among prospective buyers.
Political uncertainty has also added to the subdued market sentiment. With New Zealand's national election scheduled for November, some buyers appear to be delaying major financial decisions until there is greater clarity on the country's economic and policy outlook.
The latest figures come after a period of gradual recovery in New Zealand's housing market following the sharp slowdown seen during the interest rate tightening cycle. Although mortgage rates have shown signs of stabilising, affordability challenges and economic concerns continue to influence demand.
Source Reuters
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