That’s why I rolled my eyes a few weeks ago, when someone said to me, “I thought I read in the paper that house prices were going down this year.”

(Rolling my eyes at the media, not the investor).

And that’s because house prices did go down 2.4% from February to July. 

But take out the seasonal effect, and they only fell 0.7% over the same period. And the last 2 months have reversed that dip. 

It’s like if the papers wrote a headline that said: “Kiwis are wearing fewer clothes.” 

When you read that headline, you might think that perhaps we’ve all become more comfortable with our bodies. 

Maybe you think Gen Z is particularly liberal and show more skin. 

Or, is it that it’s almost summertime? The weather is warmer. So, we shed our Winter layers?

If you just cherry picked the last 3 months, you could reach the wrong conclusion. 

Context matters.

And the truth of the matter is that house prices went sideways over the last year. They are up just 0.2% year on year. Barely moving at all. 

Here’s where the recovery is underway 

While house prices aren’t skyrocketing, the number of property transactions is.

At the bottom of the market, Kiwis sold around 59,000 homes a year. 

Now, that’s up to about 78,000. Just shy of the long-term average of around 81,000.

This is important, because over the last few years it’s the build-up of property listings that has kept house prices lower 

We’ve got the highest number of properties for sale online that we’ve had in a decade. 

But after a large build-up, those stock levels have stopped going up. 

Sure, they’ve still settled at a high level. But you’re not seeing that same build-up you’ve seen before.

That tells me that the market is now stable. House prices have stopped falling. 

The build-up of listings has stemmed. 

So maybe (just maybe) those house price forecasts could be correct.