The number of residential properties offered at auction in New Zealand fell to its lowest weekly level of the year last week, with fewer than a third selling under the hammer and prices softening across the country.
The New Zealand residential property market has recorded its coldest start to winter in the auction rooms, with a sharp drop in listings, a lower clearance rate, and prices easing across the country.
Interest.co.nz monitored the auctions of 291 residential properties around the country over the week of 30 May to 5 June, the lowest number of properties on offer in a single week so far this year, apart from the short week following the Easter break. The number fell from 340 the previous week and 345 the week before that.
Sales results were also softer. A total of 93 properties sold under the hammer, giving an overall sales rate of 32 percent — down from 33 percent the previous week and 37 percent two weeks prior.
Perhaps most notably for vendors, prices appeared to soften. Less than half — 49 percent — of the properties that sold achieved prices equal to or above their rating valuations. In Auckland, the picture was even cooler: under a third of properties sold at or above their rating valuations.
The auction data suggests that vendors who set asking prices above what the market is willing to pay are finding fewer buyers willing to meet them. A falling clearance rate combined with properties selling below rating valuations is a signal that buyer sentiment has not kept pace with seller expectations.
For context, rating valuations are based on recent comparable sales and tend to lag the current market. When a significant proportion of properties sell below those valuations, it indicates that the market has shifted lower since those valuations were set — or that vendor expectations remain elevated relative to where buyers are transacting.
The cooling auction results follow a year in which the housing market has been navigating higher mortgage rates, cautious borrowing conditions, and an inflation-adjusted decline in real house prices from their 2021 peak. Real house prices are down roughly 31 percent from that peak, in line with international comparisons of inflation-adjusted prices. The latest weekly data does not on its own establish a trend, but it is consistent with a market that has not yet found sufficient momentum to push prices higher.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.