Beleaguered housing market takes a fresh leg lower

Sales fell another 7.7% in seasonally adjusted terms, bringing them closer to the lows seen in the wake of the 2008 Global Financial Crisis. Prices fell by 2.2% for the month, the biggest monthly decline seen so far in this downturn.

The fall in prices was widespread across the country, though generally larger in the North Island than in the South. Wellington and Auckland remain the weakest regional markets, down 21% and 19% respectively from their peaks.

Westpac senior economist Satish Ranchhod says the bank is expecting a cumulative 21% drop in average house prices from their peak. “Our forecast assumes that this decline continues through 2023 and into early 2024. However, the risks are towards this price weakness playing out faster than we’ve assumed.”

The latest REINZ report shows just 5,525 properties were sold last month, dropping 36% compared to November last year. It was the lowest number of sales since 2010.