Article: REINZ News

Despite Challenging Conditions, Residential Prices Increase  Across NZDespite Challenging Conditions, Residential Prices Increase Across NZ

Median residential property prices across New Zealand have increased by 1.2% year-on-year to $525,000 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.

Nationally, excluding Auckland, median prices increased 5.7% year-on-year and Auckland median prices remained flat at $845,000. However, on a month-on-month basis, Auckland’s median price increased by 1.2% or by $10,000.

Contributing to the overall increase, six regions across the country experienced double-digit median price increases in September year-on-year:

•Tasman (up 19.3% to $572,500)

•Hawke’s Bay (up 18.3% to $392,000)

•Gisborne (up 14.9% to $270,000

•Northland (up 14.4% to $446,000)

•Wellington (up 10.6% to $531,000)

•Southland (up 10% to $220,000).

Only two regions experienced price decreases during September (compared to September 2016) – West Coast (down 15.6% to $208,500) and Canterbury (down 3.2% to $426,000).

Bindi Norwell, CEO at REINZ says: “Prices across the country increased in all but three regions, evidence that the market continues to grow despite some challenging conditions – including the LVR restrictions and banks continuing to tighten lending conditions. Much of the increase has been driven by the buoyancy in the regions.”

Soggy start to spring impacts sales volumes
The number of properties sold during September fell 26.2% year-on-year (from 7,352 to 5,428) the lowest number of properties sold in the month of September for 6 years. Nationally, excluding Auckland, volumes decreased by 23.7% year-on-year.

Looking at the regional picture, again all 16 regions in the country experienced a decrease in the number of properties sold on a year-on-year basis. Regions with the biggest reduction in volumes were Tasman (down 37%), Southland (down 34%) and Auckland (down 31.5%). Marlborough experienced the lowest number of sales since January 2012 (down 27.4%).

The month-on-month figures provide a more positive picture, however, with a number of regions experiencing an increase in the number of sales in comparison to August, and two regions experienced double-digit growth – Gisborne (up 25%) and Taranaki (up 11.4%).

“The soggy start to spring combined with the ‘election effect’ has had a significant impact on the number of sales across the country – this is the lowest number of sales in eight months, and the lowest number of sales in the month of September for six years. However, it’s not all doom and gloom as there are pockets of the country experiencing increases month-on-month and median prices are increasing in the majority of regions across the country,” continues Norwell.

REINZ HPI reaches new high
The REINZ House Price Index for New Zealand increased 0.7% month-on-month to reach an all-time high of 2,699 during September, indicating that the ratio of sales prices when compared to CVs is at its highest point since the Index began.

The HPI also showed that all but three regions (Auckland, Taranaki & Canterbury) reached a new high during September indicating strong value growth across most of the country. Regions with the highest growth year-on-year include Gisborne/Hawke’s Bay (up 14.7% to 2,283), Manawatu-Wanganui (up 12.8% to 2,409), Wellington (up 11.8% to 2,377) and Northland (up 11.7% to 2,575).

Number of days to sell
The median number of days to sell a property nationally increased by 3 days (from 31 to 34) when compared to September 2016.

Regionally, Taranaki saw the biggest increase in the number of days to sell (up 8 days to 31), followed by Waikato and Otago (both up 5 days to 35 and 30 respectively) and Auckland and Canterbury (both up 3 days to 37 and 34 respectively).

Regions with the biggest decreases year-on-year included the West Coast (down 13 days to 105), Gisborne (down 3 to 28) and Hawke’s Bay and Nelson (both down 2 days to 28 and 23 days respectively).

Interestingly though, the median number of days to sell on a month-on-month basis, decreased for all regions bar the West Coast.

Auctions
The number of properties sold by auction continues to decline across New Zealand with 807 auction sales in September – down 54.5% on the same time last year. Auctions now only represent 14.9% of all sales nationally.

In Auckland, which traditionally sees a large portion of sales sold by auction, only 422 (26.5%) of all properties sold in September were via auction – this is a decrease of 57% in comparison to September 2016.

No regions saw an increase year-on-year in the number of properties auctioned, however, month-on-month Gisborne, Manawatu-Wanganui, Otago, Southland, Taranaki and Waikato all saw an increase in auction numbers.

Price Bands
Between September 2016 and September 2017, the number of homes sold fell in every price bracket. The number of properties sold for more than $1million fell by 29.9% from 1,020 to 715 to equal 13.2% of all dwellings sold.

The number of dwellings sold for less than $500,000 fell by 27.5% from 3,510 to 2,545 to equal 46.9% of all homes sold across the country.

Inventory
The number of properties available for sale nationally decreased by 2.6% (from 22,311 to 21,727) compared to 12 months ago, whereas the number of properties for sale in the Auckland region increased by 14% year-on-year (from 6,513 to 7,429). Excluding Auckland, the number of properties for sale fell by 9.5% (from 15,798 to 14,298) highlighting the impact Auckland has on the overall picture.

In addition to Auckland, three other regions experienced an increase in listings – Waikato (8.2%), Wellington (2.8%) and Canterbury (3.6%). The regions with the biggest decrease in inventory were Gisborne (29%), Taranaki (24.3%) and Manawatu-Wanganui (22.7%).
Northland, Taranaki and West Coast have the lowest levels of inventory since records began 10 years ago.

“Overall, the New Zealand housing market continues to remain in a strong position. While volumes are down, median house prices across the country have increased again. As the weather warms up we expect the market to pick up again,” concludes Norwell.

Auckland
Compared to September 2016 the median price stayed the same at $845,000. However, most of the TA’s within the region saw increases in their median price over the same time period with Manukau City leading the way with a 7% increase. It was Auckland City and Papakura District only that saw decreases in their median price since September 2016, the latter most significant at -4%. Compared to August 2017, the overall region median increased 1%. The performance of the TA’s was largely negative with only Manukau City and Waitakere City experiencing an increase (5%and 2% respectively). On a seasonally adjusted basis, Auckland’s median price did not change compared to August, indicating that the median price rose by exactly what we’d expect in September.

Sales volume in the Auckland region decreased 13% compared to August, with large falls in sales numbers in Franklin District, Auckland City, Manukau City and Waitakere City (11% - 22% decreases). Compared to September 2016 sales fell 32% with volumes decreasing in all TA’s, except for Papakura District. Most notable drops occurred in Auckland City (-46%), Franklin District (-27%) and Waitakere City (-27%). On a seasonally adjusted basis, sales volumes fell 9% compared to August indicating that the decrease in sales from August was much greater than expected.

The number of days to sell improved by three days in September, from 40 days in August to 37 days in September. The number of days to sell eased by three days compared to September 2016. Over the past 10 years the average number of days to sell during September for Auckland has been 34 days. There are now 23 weeks of inventory in the Auckland region, an increase of 11 weeks compared to September 2016.

Northland
The median price across the region rose by $56,000 (+14%) compared to September 2016. Prices rose 46% in Kaipara, 18% in Far North, 8% in Whangarei. Compared to August 2017, the median price increased $16,000 (4%) with prices falling 13% in Kaipara, but increasing 17% in Far North and 0% in Whangarei. On a seasonally adjusted basis the median price rose 2% compared to August, indicating that the increase in median price was a little more than expected.

Sales volume in Northland increased 9% compared to August with sales rising 15% in Whangarei, 4% in Kaipara and 2% in Far North. Compared to September 2016, sales volumes fell 29% across the region, with a 41% fall in Far North, 23% fall in Whangarei and a 10%
fall in Kaipara. On a seasonally adjusted basis, sales increased 2% compared to August, indicating that the increase in sales from August was a little more than expected.

The number of days to sell improved by one week compared to August, from 46 days in August to 39 days in September. The number of days to sell eased by two days compared to September 2016. Over the past 10 years the average number of days to sell during September for Northland has been 59 days. There are now 34 weeks of inventory across the Northland region, an increase of 10 weeks over the past 12 months.


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