Article: REINZ News

$27K Price Increase Sees NZ Hit New Record Median  Price In May$27K Price Increase Sees NZ Hit New Record Median Price In May

A year-on-year price increase of $27,000 has seen New Zealand achieve a new record median house price of $562,000 – a 5.0% increase – according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand.

Median prices for New Zealand excluding Auckland increased by 5.8% annually to $455,000, up from $430,000. However, Auckland’s median price decreased 1.3% from the same time last year, with May 2018 seeing a price of $852,000 (down from $862,800 in May 2017).

Three regions achieved record prices in May:

• Northland – up 6.7% year-on-year resulting in a median of $475,000 (up from $445,000)
• Tasman – up 16.2% year-on-year resulting in a median of $612,000. This is the first time the median price for Tasman has gone over $600,000
• Manawatu/Wanganui had a record equal median price of $305,500 - the same as the median price in April 2018.

Other regions that saw a strong increase in price from May 2017 to May 2018 were the West Coast (+25.7% to $220,000 – the highest price in 7 months), Otago (+14.6% to $440,000) and Hawke’s Bay (+13.2% to $430,000).

Bindi Norwell, Chief Executive at REINZ says: “The record price for New Zealand of $562,000 continues to highlight the buoyancy of the housing market across the country. Of the 16 regions in New Zealand 13 saw an annual price increase – 5 of which were double digit increases showing that the demand for good property continues unabated. Only three regions saw a year-on-year price decrease – Auckland, Gisborne and Southland.

“The record median price achieved in Tasman has seen the region skip both Wellington and the Bay of Plenty to become the second most expensive region in New Zealand in just a single month highlighting just how popular the region continues to be – even as we head into winter. It’s staggering to think that a region of 51,000 people has more expensive property than a region of nearly 514,000* people,” continues Norwell.

“Looking at Auckland, it seems like the market has found a middle ground around the $850,000 mark, as 3 out of the past 5 months have seen a median price in this range. This suggests that the standoff between buyers wanting a bargain and sellers wanting an unrealistic price is coming to an end,” she continues.

“Despite the year-on-year decrease, Auckland’s median price of $852,000 is actually up $2,000 on April 2018. Putting the year-on-year figure into perspective, the REINZ HPI for Auckland increased 0.6% year-on-year, highlighting that, despite a decrease in median price, the market is actually not in decline – it’s just a result of a decrease in $1 million plus properties year-on-year,” points out Norwell.

Median House Price Year-On-Year
National $562,000 - up from $535,000 + 5.0% year-on-year
New Zealand Ex Auckland $455,000 - up from $430,000 + 5.8% year-on-year
Auckland $852,000 - down from $862,800 - 1.3% year-on-year

Seasonally Adjusted Median House Price
National Up 1.1%, up 4.5% on May 2017
New Zealand Ex Auckland Down 0.3%, up 5.3% on May 2017
Auckland Down 0.4%, down 0.8% on May 2017

Median House Price Month-On-Month
National $562,000 - up from $550,000 + 2.2% since last month
New Zealand Ex Auckland $455,000 - down from $460,000 - 1.1% since last month
Auckland $852,000 - up from $850,000 + 0.2% since last month

Median Days To Sell
National 38 - 1 day longer than same month last year
New Zealand Ex Auckland 36 - same number of days as same month last year
Auckland 40 - same number of days as same month last year

Reinz House Price Index
National 2702 - up from 2606 + 3.7% year-on-year
New Zealand Ex Auckland 2554 - up from 2392 + 6.8% year-on-year
Auckland 2883 - up from 2866 +0.6% year-on-year

Volumes up: The number of houses sold in May 2018 across New Zealand increased by 1.3% (to 7,578 up from 7,482) when compared to the same time last year. However, the number of properties sold in New Zealand excluding Auckland decreased 0.5% year-on-year to 5,247 down from 5,271 in May 2017.

The number of houses sold in Auckland increased 5.4% year-on-year, from 2,211 in May 2017 to 2,331 in May 2018.

Regions with the largest increases in sales year-on-year were:

• Nelson – up 25.3% from 83 sales to 104
• West Coast – up 20.9% from 43 to 52 – the highest sales count in 6 years
• Gisborne – up 15.8% from 57 to 66
• Hawke’s Bay – up 12.5% from 248 to 279 - the highest sales count in 14 months.

Regions with the biggest decreases year-on-year were Tasman (-16.9% - the lowest number of properties sold for the month of May for 9 years), Marlborough (-10.4%), Otago (-7.4%) and Northland (-6.6%).

Auctions: Auctions were used in 12.7% of all sales across the country in May, with 961 properties selling under the hammer – this is down slightly from May 2017, when 13.3% of properties (996) were sold via auction.

For the fourth month in a row, Gisborne had the highest percentage of auctions across the country with just shy of a third of properties (30.3% or 20 properties) in the region sold under the hammer – down from 40.4% (23 properties) in May 2017. Auckland saw the second largest percentage of auctions on 21.1% (492 properties) down from 24.3% in May 2017 (539 properties) and the Bay of Plenty on 16.8% (91 properties) down from 19.4% (98 properties) in May 2017.

Price Bands: The number of homes sold for less than $500,000 across New Zealand fell from 45.6% of the market (3,409 properties) in May 2017 to 42.4% of the market (3,210 properties) in May 2018 which is reflected by the overall increasing median price.

The number of properties sold in the $500,000 to $750,000 bracket increased from 26.8% in May 2017 (2,003 properties) to 28.4% in May 2018 (2,155 properties). At the top end of the market, properties sold for more than $1 million increased marginally from 14.1% of the market in May 2017 (1,053 houses) to 14.2% of the market this year (1,079 houses).

Auctions: Auctions were used in 13.2% of all sales across the country in April, with 843 properties selling under the hammer – this is down from April 2017, when 17.3% of properties were sold via auction showing that auctions are becoming a less popular method of sale across the country.

For the third month in a row, Gisborne had the highest percentage of auctions across the country with more than half of all properties (57.6%) in the region sold under the hammer, followed by Auckland on 23.5% and the Bay of Plenty on 14.5%.
In Auckland, 436 properties were sold by auction in April compared to 559 properties in April 2017.

Price Bands: Between April 2017 and April 2018, the number of homes sold for less than $500,000 across New Zealand fell from 44.6% of the market (2,664 properties) to 43.1% of the market (2,747 properties)which is reflected by the overall increasing median price.
The number of properties sold in the $500,000 to $750,000 bracket increased from 26.9% in April 2017 to 28.3% in April 2018. At the top end of the market, houses sold for more than $1 million decreased from 14.2% of the market in April 2017 to 13.8% of the market this year.

Inventory: The number of properties available for sale nationally increased by 1.0% from 24,229 to 24,477 – an increase of just 248 properties compared to 12 months ago. For the third month in a row the New Zealand figure has been buoyed by inventory increases in Nelson (+29.3% - an additional 96 properties – the largest annual inventory growth on record), Hawke’s Bay (+8.9% - an additional 41 properties) and Waikato (+8.8% - an additional 140 properties).

The New Zealand excluding Auckland inventory level fell by 1.0% from 15,607 in May 2017 to 15,455 in May 2018. Auckland’s annual inventory increased by 4.6% (from 8,622 to 9,022 - an additional 400 properties).

Regions with the biggest falls in inventory were:
• Southland – down 20.1%
• Gisborne – down 19.2%
• West Coast – down 16.8%
• Manawatu/Wanganui – down 13.7%.

Again, the Wellington region has had the lowest number of weeks’ inventory across the whole country with only 8 weeks’ inventory available to those looking to purchase in the area. The Hawke’s Bay has seen a slight increase from 8 to 10 weeks’ inventory year-on-year. Similarly, Otago is also sitting on 10 weeks’ inventory, but this is down from 11.3 weeks’ inventory when compared to May 2017.

Auckland
Compared to May 2017
• Median Price down 1.3%
• Sales Count up 5.4%
• Days to Sell unchanged

Compared to April 2018
• Median Price up 0.2%
• Seasonally adjusted median price down 0.4%
• Sales Count up 22.8%
• Seasonally adjusted sales count up 1.1%
• Days to Sell increased 3 days.

Our seasonally adjusted results tell us that, compared to what we expect when moving from April to May, the observed minute increase in median price was fractionally less than expected and the observed increase in sales count was slightly greater expected. The current Days to Sell of 40 days is more than the 10-year average for May which is 35 days. The level of inventory available for sale currently sits at 21 weeks, one week less than in May 2017.

Northland
Compared to May 2017
• Median Price up 6.7%
• Sales Count down 6.6%
• Days to Sell increased 6 days

Compared to April 2018
• Median Price up 5.6%
• Seasonally adjusted median price up 6.2%
• Sales Count up 4.1%
• Seasonally adjusted sales count down 5.5%
• Days to Sell increased 9 days.

Our seasonally adjusted results tell us that, compared to what we expect when moving from April to May, the observed increase in median price was in contrast to the expected slight decrease and the observed increase in sales count was smaller than expected. The current Days to Sell of 47 days is considerably less than the 10-year average for May which is 60 days. The level of inventory available for sale currently sits at 28 weeks, the same as in May 2017. REINZ


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