House sales are taking longer to complete, properties are staying on the market longer and the upward pressure on prices are easing.
Residential sales volumes fell 28.4 percent, and in Auckland declined 38 percent, from May last year. Photo: RNZ / Marika Khabazi
The Real Estate Institute's (REINZ) latest residential property report shows the house price index, which measures the changing value of properties, increased 3.7 percent for the year ended May, compared with a 6.3 percent increase in April.
The seasonally adjusted national median house price was up 3.1 percent from May 2021 to $840,000.
But the month-on-month price decreased 3.1 percent from April this year, when it hit $875,000.
The median price excluding Auckland, was up 7.8 percent to $730,000 year-on-year.
In Auckland, the median fell 1.9 percent from a year ago to $1,125,000.
Residential sales volumes declined 28.4 percent, and in Auckland fell by 38 percent, from May last year.
REINZ chief executive Jen Baird said the supply-demand balance had shifted and the market had hit a slower pace, with houses taking an average 43 days to sell, 13 days more than May 2021.
"In a more moderate market, there is usually a move away from auctions and an increase in properties listed with prices. With an increase in buyers who cannot buy unconditional - who require finance and other conditions - some sellers are reluctant to go to auction."
She said real estate agents were reporting an increase in the number of sales made in the few days after an auction to a conditional buyer.
"While on-the-day auction clearance rates have fallen, we continue to see serious buyers attend. Auctions are a transparent way to evaluate the market value of a property, and while a home may not sell on the day, they generate interest and open the sale up for conditional buyers."
Baird said while annual sales counts were down across the country, there was an uptick in sales in May compared to April.
"Access to finance, interest rates, and inflation are primary concerns for buyers. December changes to the CCCFA [Credit Contracts and Consumer Finance Act] had a major effect on people's perception of their ability to enter the market.
"As the pace of the market and price growth continue slow, there is a fear of overpaying, and buyers are stepping back to see what happens in the market over the coming months," she said.
Across the country, the West Coast led the way, with its seasonally adjusted median house price up 31.4 percent from May 2021 to $395,000.
In Wellington, the median price increased 2.3 percent to $895,000 and in Canterbury, the median increased 17.4 percent to $685,000.
Aside from Auckland, the only other region to decline was Hawke's Bay, with the median price decreasing 1 percent annually to $730,000.