Data from the Real Estate Institute of New Zealand indicate that residential property prices are still spiraling up and experts attribute to growth to a combination of factors that include the anticipation of new lending laws as well as a strong lack of supply. The Auckland price index now sits 17.9% higher than it was a year ago and other areas are performing in like manner. Even so, sales haven’t slowed as many first-time buyers and others attempt to snap up properties before the Reserve Bank’s new lending policy takes effect. For more on this continue reading the following article from Property Wire.
The residential property market in New Zealand is reporting storing activity from first time buyers, especially in the regions, and overall prices and sales are continuing to move upwards.
There was a new median high price for properties in Nelson/Marlborough and in Canterbury/Westland prices moved back to a median high, according to the latest data from the Real Estate Institute of New Zealand.
The Auckland house price index also hit a new high and is now 17.9% above a year ago. While the national median price increased $5,000 in August compared with July to $390,000 and is now just $13,000 below the record median price set in March 2013.
Sales are up 8.5% compared with August 2012 and 21.6% of sales recorded last month were sold by auction. Overall the market is experiencing a significant shortage of listings, says REINZ.
‘Agents from around the country are reporting strong activity from first home buyers moving to secure properties ahead of the Reserve Bank’s LVR changes. However, the reports suggest that this is occurring more in the regions, rather than in Auckland and Christchurch where we are seeing the greatest price pressure,’ said REINZ chief executive Helen O’Sullivan.
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‘Overall the real estate market remains active with sales volumes about in line with what we would normally expect for this time of year,’ she explained but added that there are signs of a slow down in the rate of sales volume growth.
In August last year sales growth was running at 12% per annum and peaked at 33% per annum in April. Now, it has eased to 9% per annum and is trending down. At the regional level only Northland, Auckland and Waikato/Bay of Plenty are reporting volume trends above the national average, with all other regions well below the average.
‘Compared to the previous market volume peak during 2001 to 2004 volumes have not risen as fast in this cycle and are now trending down more quickly. A key factor is the continuing lack of listings, which limits the stock of properties available for sale and reduces choice for buyers,’ explained O’Sullivan.
‘Agents report across the country that potential sellers are taking a wait and see attitude both in terms of rising prices and what effect the Reserve Bank’s new lending policy will have on the market. This uncertainty in the short term is exacerbating the problem of supply, although there should be a traditional lift in properties for sale as Spring takes hold,’ she added.
All bar one region recorded increases in sales volume compared to August last year, with Northland recording an increase of 15.3%, followed by Auckland with 12.6% and Canterbury/Westland Lakes with 12.1%. Nine regions recorded a decrease in sales volume in August compared to July, with Waikato/Bay of Plenty and Southland both recording a decrease of 9.7%, followed by Manawatu/Wanganui with a decrease of 5.5% and Nelson/Marlborough with a decrease of 5.1%.
Compared to August 2012 the national median house price increased by $20,000 or 5.46%, with 12 regions recording an increase in the median price. Three quarters of the increase in the national median price compared to August last year occurred in Auckland and 8.4% occurred in Canterbury/Westland. Together these two regions accounted 83.5% of the increase in the median price between August 2012 and August 2013.
Three other regions are at or near their highest median prices. Nelson/Marlborough recorded a new record median price of $366,500. Compared to August 2012 Hawkes Bay recorded the largest increase in median price, up 15.7%, followed by Manawatu/Wanganui with 11.6%. Auckland’s increase was 11.4% and Canterbury/Westland achieved 5.8%.
The REINZ Stratified Housing Price Index, which adjusts for some of the variations in mix that can impact on the median price, reached a new record high in August and is 9.5% higher than August 2012.
The Auckland Index also reached a new record high in August and has risen 17.9% compared to August 2012. The Christchurch Index is up 6.1% and the Wellington Index is up 4.4%. Houses took one day less to sell in August compared to July, improving from 35 days in July to 34 days in August. Compared to August 2012, the number of days to sell also improved by one day. Five regions saw an improvement in the number of days to sell between August 2012 and August 2013, with Taranaki recording the largest improvement of nine days.
For the month of August, Canterbury/Westland recorded the shortest days to sell at 28 days, followed by Auckland at 29 days, and Wellington at 40 days. Northland recorded the longest number of days to sell at 72 days, followed by Southland with 71 days and Central Otago Lakes with 65 days. Over the past 10 years the median days to sell for the month of August has averaged 37 days across New Zealand.
This article was republished with permission from Property Wire.