New Zealand property sales dropped for a seventh consecutive month in July, as some lifts in mortgage rates and broader economic uncertainty keep both buyers and sellers in a cautious mood.
New Zealand property sales drop as buyers and sellers remain in cautious mood
New Zealand property sales dropped for a seventh consecutive month in July, as some lifts in mortgage rates and broader economic uncertainty keep both buyers and sellers in a cautious mood.
Cotality’s Chart of the Month in the August Housing Chart Pack shows total property deals covering both private and estate agent sales fell -6.4% from the same month last year to 6,935.
This ongoing slowdown in activity has eased the 12-month running total of sales to 89,385, down from December’s mini-peak of 91,411.
However, first home buyers (FHBs) continue to stand out and take advantage of the conditions. This group pushed their market share to a new monthly high of 29% in July, with transaction volumes for FHBs also continuing to rise.
Cotality Chief Property Economist Kelvin Davidson said the sustained pull-back in overall transactions has kept available listings high by historical standards, giving active buyers significant leverage on price, even as vendors hold firm against major discounting.“Buyers aren't in any rush given the high level of available stock, but sellers aren't capitulating either, given that job losses have been relatively limited. That's keeping property values subdued, down -0.3% nationally in July, which FHBs are benefiting from,” he said.
Mr Davidson noted that other buyer groups are treading more carefully as cost and economic pressures mount.
“Relocating owner-occupiers, or 'movers', remain less active than normal as economic and job uncertainty weighs on sentiment. Meanwhile, mortgaged multiple property owners saw a slight uptick in market share in July, but this may be short-lived given the cashflow squeeze from flat rents, rising holding costs, and general election uncertainty,” he said.
“Adding to market headwinds, the Reserve Bank has commenced a tightening cycle for the official cash rate, with expectations building for another potential increase in September as they look to reduce future inflation risks.”
“Mortgage rates have already drifted higher in recent weeks. While many borrowers are attempting to hedge further rises by taking out longer-term fixed rates, those rolling off shorter fixed terms onto new two-year loans face higher rates.
“Looking ahead, sales volumes seem poised to keep trending largely sideways or slightly down in the coming months, with mortgage rates now drifting higher.”“All in all, housing market activity remains subdued, and the second half of 2026 is likely to look quite similar for both sales volumes and property values,” concluded Mr Davidson.
