Prices rose in 14 of New Zealand’s 16 regions for the year to October, leading to the median house price for New Zealand, excluding Auckland, to reach a record price of $440,000 (an 8.5% 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.
Contributing to the increase were record prices in four regions:
- Waikato – up 9.9% to $500,000
- Manawatu/Wanganui – up 11.5% to $290,000
- Canterbury – up 4.7% to $450,000
- Otago – up 14.4% to $412,000.
Nationally, the median price rose by 3.9% year on year to $530,000. However, median prices in Auckland fell by 3.2% year on year to $850,000 – the biggest fall since December 2010. The only other region across the country to experience a fall in the median price year-on-year, was Nelson, which saw a decrease of 6.8% to $447,500 – the biggest drop since April 2012.
Bindi Norwell, CEO at REINZ says: “As we’ve seen for some months now, prices across the country have continued to increase, albeit at a slower rate than the increases we’ve seen in some regions for the last couple of years. Waikato is now the sixth region in the country to have exceeded the half a million dollar mark at least once – something, that a few months ago, we predicted would happen shortly.
“The Auckland Region’s decrease of 3.2% year-on-year is predominantly the result of a large number of apartments being sold in the old Auckland City boundary which has therefore brought the median price down for the entire region. Auckland City’s median fell by 17% to $850,000 the lowest price it’s been for 16 months. Interestingly, Franklin District prices increased 16% year-on-year to $737,000 and North Shore City remains New Zealand’s only million-dollar plus city,” she continues.
“Looking at the REINZ House Price Index (HPI) for the legacy Auckland City it only decreased 0.8% year-on-year, whereas the median for the same period fell by 17%, highlighting that the drop in median price is not as dramatic as a first glance would suggest. This is because the HPI considers the mix and value of the property sold, not just the sales price,” points out Norwell.
Volumes still down, but showing signs of life
The number of properties sold across New Zealand was down 16% year-on-year to 5,689. Volumes for New Zealand, excluding Auckland, were down 14% year-on-year to 4,057 and Auckland’s sales count was down 21% to 1,632.
Other regions with the biggest drop in volumes year-on-year were:
- West Coast – down 31%
- Manawatu/Wanganui – down 24%
- Northland – down 21%
- Bay of Plenty – down 21%.
“For the last three months, not a single region in New Zealand experienced an increase in sales volumes year-on-year, however, this month we’ve seen two regions Gisborne and Southland with an increase (up 8% and 1% respectively) suggesting that we’re starting to see the traditional spring increase finally kick in. This picture is even more apparent on a month-on-month basis, as 8 out of 16 (or half) of the regions across New Zealand experienced an increase in volumes. On a month-on-month basis, volumes were up 45% in Marlborough, up 18% in Wellington and up 7% in Nelson,” point out Norwell.
“However, it’s clear that the volume of properties sold across the country is still significantly lower than it was this time last year. Therefore, we welcome the Reserve Bank’s comments last week that they will make an announcement later this month around reviewing the restrictions and the criteria that they would adopt for the removal of LVRs. This data is evidence that the LVR restrictions have done their job of slowing the market, which is why REINZ has repeatedly called for LVRs to be reviewed for first time buyers,” continues Norwell.
REINZ House Price Index
The REINZ House Price Index for New Zealand increased 0.2% month-on-month to reach an all-time high of 2,708 during October indicating that the ratio of sales prices when compared to CVs is at its highest point since the Index began. The same is true for New Zealand, excluding Auckland, with a record high of 2,445.
The REINZ HPI also showed that seven regions (Bay of Plenty, Gisborne/Hawke’s Bay, Manawatu/ Wanganui, Taranaki, Tasman/Nelson/Marlborough/West Coast, Otago and Southland) all reached new highs during October indicating strong value growth across most of the country. Only 3 regions saw a decrease in the Index month-on-month – Northland down 0.7%, Waikato down 0.8% and Canterbury down 0.2%.
Regions with the highest growth year-on-year were Gisborne/Hawke’s Bay (up 15.5% to 2,330), Tasman/Nelson/Marlborough/West Coast (up 11.2% to 2114) and Southland (up 11.3% to 2365).
Days to sell
The median number of days to sell a property nationally increased by 2 days (from 32 to 34) when compared to October 2016.
Regionally, Northland saw the biggest increase in the number of days to sell (up 10 days to 49), followed by Marlborough (up 9 days to 32), Nelson (up 6 days to 29) and Waikato (up 5 days to 36).
Regions with the biggest decreases year-on-year included the West Coast (down 69 days to 62 – the lowest figure for the month of October for 7 years), Taranaki (down 11 days to 28) and Southland (down 2 days to 28).
The number of properties sold by auction continues to decline across New Zealand with 869 auction sales in October – down 42% on the same time last year, but up 4% from last month. Auctions now represent 15% of all sales nationally.
In Auckland, which traditionally sees a large portion of sales sold by auction, 464 (28%) of all properties sold in October were via auction – this is a decrease of 44% in comparison to October 2016 but an increase of 8% month-on-month indicating a return of positivity to the Auckland market.
Other regions that saw an increase in the number of properties auctioned month-on-month were Canterbury, Marlborough, Northland and Waikato.
The number of properties available for sale nationally increased by 4% (from 23,385 to 24,307) compared to 12 months ago, whereas the number of properties for sale in the Auckland region increased by 17% year-on-year (from 7,214 to 8,465). Excluding Auckland, the number of properties for sale fell by 2% (from 16,172 to 15,843) highlighting the impact Auckland has on the overall picture.
In addition to Auckland, four other regions experienced an increase in inventory – Waikato (19%), Wellington (15%), Nelson (20%) and Canterbury (9%). The regions with the biggest decrease in inventory were Gisborne (25%), West Coast (19%) and Marlborough (15%).
Between October 2016 and October 2017, the number of homes sold fell in every price bracket. The number of properties sold for more than $1million fell by 25% from 974 to 726 to equal 13% of all dwellings sold.
The number of dwellings sold for less than $500,000 fell by 19% from 3,292 to 2,676 representing 47% of all homes sold across the country. However, month-on-month the number of sub $500,000 homes sold increased by 1%.
“With October bringing temperatures well above average for most of the country combined with more certainty in the market following the coalition announcement, the combined effect has had a positive impact on the property market. One could say that the market has returned to its usual spring state now,” concludes Norwell.