Photo: RNZ
House sellers cut their asking prices by a combined $63 million in the first quarter of this year, according to Realestate.co.nz.
That figure compares the original asking price of a property when it was first listed with the price when it was sold or withdrawn.
It is down from just under $70 million in reductions recorded in the first quarter of 2024. But more properties were discounted this year - 1686 had their prices cut in the first quarter of this year compared to 1624 in the first quarter of 2024.
Spokesperson Vanessa Wiliams said vendors were trying to price their properties to meet the market, which reduced the need for price cuts once properties were listed.
"Nationally, the average asking price has been trending downward over the past year, and stock levels are at decade-highs. We're starting to see sellers come to market with more realistic expectations from the outset, which reduces the need for major price cuts later on."
The biggest drops by dollar value were in Auckland, down almost $10m, Waikato down $7m and Wellington down almost $6m.
"All up, that's millions of dollars no longer circulating in the market. Buyers aren't paying it, and sellers aren't receiving it."
The smallest drops were in Wairarapa, where vendors reduced an average of $24,346 from their asking prices. This was followed by Otago (down $26,220) and Hawke's Bay (down $26,490).
Williams said the drops could be a helpful benchmark for buyers and sellers.
"For sellers, it offers a realistic view of how much they may need to negotiate. For buyers, it can give a sense of how much wriggle room might be available when making an offer."
March sales 'roaring back to life'
Meanwhile, CoreLogic data shows sales activity is picking up.
Sales volumes were 11 percent higher in March than in March last year.
"There was there was a bit of a blip in sales activity in February where we actually saw a fall in sales compared to the same month a year ago, but then March came roaring back to life," CoreLogic property economist Kelvin Davidson said.
"We've actually seen sales rising for pretty much two years now, if you look on a year-on-year basis. So yes, it was coming off a very low level, but sales have been rising fairly consistently for for a couple of years and we're still probably a little bit below normal in terms of sales activity, but getting back pretty close to normal.
He said confidence was coming back due to lower interest rates.
"There's a direct financial impact of course, but also I guess just maybe people feel a bit more optimistic about the housing market."
But high levels of listings meant buyers had the balance of power. Although house values had increased a bit, that was likely to be muted. It could take some time for that backlog of property to be sold off, he said.
" I think it'll take a while to erode some of those listings. We might not see much of a shift until spring or summer, maybe even into this time next year."
Values lifted 0.5 percent in March after a 0.4 percent increase in February.
First home buyer activity as a share of the market has eased slightly from recent record highs, but investor activity was increasing.
"Mortgaged investors remain on the comeback trail. Lower interest rates are certainly helping investors by reducing the cashflow top-ups out of other income sources that are generally required on a rental property purchase," Davidson said.
He said, if the current momentum continued, there should be about 10,000 more sales this year. Prices were expected to lift 5 percent.
As bank test rates dropped, debt-to-income ratios would become more of a constraint on borrowing, Davidson said.
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