Photo: Supplied/ Dan Bailey
New Zealand's biggest bank says house prices should lift more meaningfully over the second half of this year, but values are likely to only rise 4.5 percent in 2025, not the 6 percent it previously forecast.
ANZ's economists noted house sales rose 3.4 percent in March but the strong flow of new listings meant buyers had significant choice.
The total amount of stock on the market lifted 0.6 percent in March on a seasonally adjusted basis and was the highest in 10 years.
"Prices will start to lift more meaningfully once the excess inventory has been worked through and that will take time."
They said with Auckland's housing market stock at the highest level since 2011, it was not surprising sellers were being more realistic about their asking prices.
"The sales-to-listings ratio is a useful indicator of heat in the housing market and tends to give a three- to six-month lead on house price momentum.
"A decent bounce in sales volumes in March was largely offset by another lift in listings, and the sales-to-listings ratio remains consistent with lacklustre growth in house prices in the near term."
They said the auction clearance rate had also been steady at around 40 percent in recent months.
"The median days to sell were steady in March at 46 seasonally adjusted, still a long way north of the long-run historic average of 29.
"It's been hovering around that level for several months now. While that's consistent with the housing market having stabilised, we'd need to see median days to sell beginning to fall before one could conclude the market is on a tightening trajectory."
All together, the factors indicated the market was stabilising but "not going anywhere fast".
They said the Reserve Bank was likely to cut the official cash rate twice more, to a low of 2.5 percent, where it would remain for a year or so.
"That will underpin housing market momentum further out. It's important to stress that while the here and now remains tough-going the economy is on an improving trajectory."
They said global turmoil was a headwind and there was uncertainty about how it would play out for New Zealand as a whole, and the housing market.
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