Valuation Partners Checkpoint
The month in short. August held its price and lost its pace. The national median sale price sat at $750,000, close to a year ago, but only 5,430 properties sold — the sixth-lowest August in 35 years of REINZ records — and those that did took a median 51 days. Unsold stock continues to build even as new listings fall, which tells you the backlog is a clearing problem rather than a flood of fresh supply. The south remains the exception: every South Island series on the REINZ House Price Index rose over the three months to August, while seven of the eight North Island series fell. REINZ chief executive Lizzy Ryley puts the divergence down to local employment conditions, stock levels and buyer demand rather than any single national trend. ASB, reported by NZ Adviser, expects no nationwide price growth this year and only a gradual recovery through 2027.
When a house that won't sell becomes a rental. RNZ reported on 21 September that Cotality data shows properties withdrawn from sale and re-listed for rent within three months are running at roughly 3,000 a year — up from under 2,000 in 2023, though still below the 5,500 recorded at the market peak. Cotality's Kelvin Davidson distinguishes this from the 2021 version: back then people chose to become investors, whereas now it is developers unable to achieve their price, and owners who simply couldn't get a deal. This is the human version of the days-to-sell figure, and it has practical consequences we see in our own work. Tenancy Advisory's Sarina Gibbon warns that a good family home is not automatically a good rental, and that owners often overlook what the Residential Tenancies Act and healthy homes standards require of them. Infometrics' Gareth Kiernan makes the valuation point plainly: investors typically buy in the lower quarter of the market, owner-occupiers at the median or above, so a home converted to a rental rarely yields in proportion to its value. Anyone holding rather than selling should get advice on both the compliance obligations and the realistic rental return before committing.
Australian buyers are looking at our patch. 1News reported on 18 September that Australia-based searches on realestate.co.nz were up 190% year on year in August, building since May when Australia announced changes to negative gearing and capital gains settings. The absence of a capital gains tax here and the exchange rate are also cited. What makes it locally relevant is the destination: alongside Auckland, the two regions named were Central Otago and Canterbury. The obvious caution is that enquiry is not purchase — this has not yet appeared in any sales figure, and realestate.co.nz's own Sarah Wood notes there is still ample stock for local buyers.
Fuel is back in the household budget. RNZ reported on 18 September that 91 unleaded had reached an average $3.25 a litre, up around 25 cents in a month, with the Automobile Association (AA) attributing it to constrained Middle East supply and a weaker New Zealand dollar and expecting little relief in the near term. Diesel at $2.96 matters more for our regions than the petrol figure: it runs farm equipment and freight, and it feeds into fertiliser costs. Southland, Clutha and the West Coast all rest on a rural base, and provincial buyers drive further than urban ones. It is a pressure on borrowing capacity and on confidence, though not one that shows in August's figures.
This commentary is provided for general information only. It does not constitute valuation advice, and readers should seek advice specific to their circumstances.