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New Zealand's housing market remained largely stable during the past month, with median house prices showing limited movement despite mixed regional performance. Data from the Real Estate Institute of New Zealand (REINZ) indicated that while annual prices recorded a marginal increase, home sales declined on both a monthly and yearly basis. The South Island continued to outperform several other regions, while Wellington remained subdued. The market is also adjusting to a higher interest rate environment following the Reserve Bank of New Zealand's recent policy rate increase.
New Zealand's housing market remained largely stable during the past month, with national home prices showing only marginal movement as different regions continued to perform at varying levels. According to the latest data released by the Real Estate Institute of New Zealand (REINZ), current market indicators suggest housing activity is likely to remain broadly steady through the winter season.
Seasonally adjusted median house prices declined by 0.9% compared with the previous month. However, prices were still 0.7% higher than the same period last year, indicating that annual values have remained relatively resilient despite slower market activity.
Housing transactions softened during the month. National home sales fell 1.7% from the previous month and were nearly 7% lower than a year ago, reflecting continued caution among buyers and sellers.
REINZ Chief Executive Lizzy Ryley said the housing market was becoming more settled, but the country could no longer be viewed as a single market. She noted that housing conditions now vary significantly across different regions, with local markets moving at different speeds rather than following one national trend.
Regional performance continued to highlight these differences. The South Island remained the strongest-performing part of the country. Canterbury recorded one of its best June sales results on record, while Southland continued to lead New Zealand in annual house price index growth. In contrast, housing activity in the capital city of Wellington remained subdued, reinforcing the widening gap between stronger and weaker regional markets.
The latest figures come shortly after the Reserve Bank of New Zealand (RBNZ) increased its Official Cash Rate by 25 basis points to 2.5%, marking the first interest rate hike in three years. The central bank took the step as part of its efforts to reduce monetary policy support amid rising inflation.
According to Ryley, the impact of the rate hike had already been largely reflected in the housing market because mortgage rates had adjusted in advance. She added that buyers and homeowners were continuing to adapt to a higher interest rate environment, reducing the likelihood of any immediate disruption to market activity.
The REINZ housing report suggests that while national price growth remains modest, local economic conditions, housing supply, buyer demand and borrowing costs are increasingly influencing individual regional markets rather than a single nationwide trend.
Source Reuters
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