High mortgage rates are putting pressure on the housing market, leading to “patchy” sales activity, according to new numbers.
According to new figures from CoreLogic, January had the “second lowest” level of property sales activity in 40 years.
There were 3169 sales in January, just 2% up from January 2023, where levels were 3108 – the “slowest start to the year since 1983”.
"January's sluggishness in sales is a timely reminder that the housing market is still facing quite a bit of mortgage rate pressure," CoreLogic NZ chief property economist Kelvin Davidson said.
However, Davidson said a “gradual upturn” was “clearly” on the way, with sales volumes rising “compared to a year earlier in each of the past nine months”.
“On a 12-month basis”, Davidson said, January experienced a sales increase of 4.5% to more than 67,000 – up from April, with less than 62,000.
However, sales were “still well below 'normal' levels of 90-95,000 per year”.
"Arguably, listing levels have returned to some kind of normality now, so the reduced sales over the past month probably hints at some uncertainty around buyer demand rather than a lack of choice,” Davidson said.
During the 12 months to January, there was a 5% increase for main centres and a 3.6% increase in provincial markets.
Davidson suggested February could be a “bounce back” month since January was “weaker than expected”.
"It’ll be interesting to see how sales and listing activity evolves in the next month or so and how market confidence moves too.
“We suspect the demand would be there to match any additional supply coming onto the market, resulting in an associated rise in agreed sales activity as buyers can see more choice," he said.
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