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BNZ Weekly Review by Tony Alexander

Residential Real Estate

The REINZ released their residential real estate sales data last week and what the numbers show us is what we already knew – falling sales almost everywhere, prices flattish to falling in Auckland, prices still rising in most other locations.

Nationwide the number of dwellings sold in the three months to July was down by 22% from a year earlier. This continues a trend of falling sales ever since the Reserve Bank made banks implement their minimum 40% deposit rule for investors from the third week of July last year. This trend has further to run and as we wrote here a few months back, the chances are that annual sales will continue to fall over the remainder of this year and next until 12 month sales total something less than 65,000.

In the year to July sales totalled 80,000 and the peak was 95,000 in the year to June last year. The low before that was 55,000 in 2011 and before that 54,000 early in 2009. The risk is that sales fall below 65,000 and this means people exiting the real estate industry. 

To read the entire article from Tony Alexander please click here.