New Zealand’s stock market ended in the red as fresh house price data kept a lid on property stocks and retirement village operators.
Devon Funds head of wealth Greg Smith said today’s real estate data, the upcoming US inflation and local GDP figures would help move things along.
The S&P/NZX 50 Index fell 51.06 points, or 0.4%, to 11,762.15. Turnover was $116.8 million.
Housing data from the Real Estate Institute (REINZ) today showed an 18.3% decline in the volume of house sales in August from a year earlier, and a 5.8% year-on-year decline in the national house price index.
Overall sales numbers dropped the most in Auckland, falling 38.9% from 2,418 to 1,477.
Smith told BusinessDesk that house prices have dropped 14% since November 2021, but that was against a backdrop of a sharp jump since the covid-19 pandemic began.
“All I would say to that is that they did go up like 30% from the start of the pandemic,” he said.
“I think people shouldn’t feel too aggrieved.”
Today, Goodman Property Trust was down 0.5% at $2.18, Kiwi Property Group fell 1% to 98.5 cents and Precinct Properties edged down 1% to $1.345.
Property For Industry was down 0.2% at $2.595 and Argosy Property fell 1.7% to $1.30.
Retirement village developers and operators Ryman Healthcare and Summerset Group were also down, falling 2.7% to $9 and 0.5% to $10.95 respectively.
Both retirement village firms were likely to be affected by falling property values, Smith said.
Statistics NZ said today that price rises across dairy commodities had driven an annual increase in the value of exports for dairy products.
The total export value of milk powder, butter, and cheese increased 17% to $18.8 billion in the year ended July 2022 from the previous year.
Stats NZ said the annual increase was “heavily driven” by exports of milk powder – up $1.1b to $10b and milk fats, including butter, up $1.1b to $3.8b.
Smith said Fonterra Shareholders’ Fund units – which were up 4.2% at $3.45 – had enjoyed another positive day on the index and the data supported the good run that the dairy sector was currently having. Fonterra upgraded its earnings guidance last week.
Synlait Milk was also up 0.9% to $3.55, while A2 Milk was down 1.4% to $6.31.
Vulcan Steel fell 2.9% to $8.67 after the company’s founder Peter Wells announced he was stepping down from the board after being in the job for 27 years. Wells set up the steel company in 1995 and plans to retire at the next annual meeting on Oct 22.
Steel & Tube Holdings was down 1.4% to $1.43.
Mercury NZ today announced plans to build a new wind farm at Kaiwera Downs in Gore for $115m.
Chief executive Vince Hawksworth said the wind farm will increase Mercury’s financial commitment to build new renewable wind generation to almost $600m since 2019.
Smith said Mercury was taking steps towards a bigger “wind footprint” with the progress of its decarbonisation plans. The shares ended the day unchanged at $6.16.
On the currency front, the NZ dollar rose to 61.27 US cents at 5pm in Wellington from 61.01 cents on Monday.
