New Zealand home sales drop, house prices holding up: REINZ
New Zealand home sales fell sharply in August in the latest sign that the country’s recently overheated housing market was losing steam, but house prices held up relatively well. The number of properties sold across the country fell 20 % last month versus a year ago, the Real Estate Institute of New Zealand (REINZ) said on Friday.
It said not one region in the country had seen a rise in the number of properties sold during August versus a year ago – something that has only happened three times in the last seven years.
REINZ said loan-to-value restrictions (LVR) were having an impact but house prices were holding up, rising 1.7 percent in August and 7.6 percent last month on an annual basis.
“If you looked at the number of properties sold, without looking at the bigger picture, one might assume that the market was showing significant signs of slowing,” Bindi Norwell, chief executive at REINZ said.
“However, as prices are holding up, and even increasing, then it suggests that people may be holding off from selling their property unless it’s absolutely necessary.”
There has been some speculation that a continued slowing in the housing market could prompt the Reserve Bank of New Zealand to re-assess its LVR restrictions, which were ramped up last year to discourage high-risk lending. But outgoing RBNZ Governor Graeme Wheeler said last month that there was a risk that the housing market would take off again if the central bank removed its LVR limits amid political pressure to rethink their used.