New Zealand’s (NZ) real estate prices have been on an unstoppable climb for some time new data from the Real Estate Institute of New Zealand indicate that a new median price record has been reached at $425,000. That’s 4.3% above the previous record and is being boosted by increases in a number of areas including Wellington, Auckland and Canterbury/Westland. The rising prices may be causing ripples in sales, though, as transaction volume lost some traction in all areas during the same period. Experts believe the slower sales may have something to do with lending restrictions, however, as opposed to the higher sales prices. For more on this continue reading the following article from Property Wire.
Prices are rising in New Zealand with the latest index recording a rise of 4.3% taking the median high price for property to $425,000, some $17,475 above the previous record high.
Auckland, Canterbury/Westland, Wellington and Waikato/Bay of Plenty all reach new high median price and Taranaki was just $500 below highest median price, according to the data from the Real Estate Institute of New Zealand.
But sales were down 6.6% on November last year and up 2.7% compared to October, which was weaker than expected, said REINZ chief executive Helen O’Sullivan.
‘The increase in real estate sales for November was weaker than expected, with November sales up only 2.7% over October 2013. As the average increase between October and November over the last 10 years has been more than 10% so this indicates a further softening in sales volumes,’ she explained.
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‘The restrictions on high LVR lending may well be a driver of the softer sales figures, with sales below $400,000 falling almost 20% compared to November last year. Analysis of the underlying sales data suggests that changes in the median price this month may be influenced by changes in the sales mix,’ she pointed out.
‘If sales in the lower pricing bands are taking longer to complete, or not occurring, this would impact on the median house price. However further data is required before we can determine if this is the beginning of a trend, a short term effect from a change in the pace of sales at certain price points, or a seasonal effect arising from an increase in the number of higher value properties brought to market at this time of year,’ she added.
All regions recorded decreases in sales volume compared to November last year. Canterbury/Westland recorded the smallest decrease of 1.4%, followed by Hawkes Bay with 2.3% and Waikato/Bay of Plenty 3.4%. Eight regions showed decreases of more than 5%, including Otago at 26.8%, Taranaki at 25.2% and Nelson/Marlborough at 17.6%. Seven regions recorded an increase in sales volume in November compared to October, with Wellington recording an increase of 15.4%, followed by Southland with an increase of 8.1% and Hawkes Bay with an increase of 6.6%.
Eight regions also recorded an increase in the median price. Some 72% of the increase in the national median price compared to November last year occurred in Auckland and 13% occurred in Canterbury/Westland. Together these two regions accounted for 85% of the increase in the median price between November 2012 and November 2013.
Auckland, Canterbury/Westland, Wellington and Waikato/Bay of Plenty all recorded new median highs in November, with Auckland reaching $620,000, Canterbury/Westland $389,750, Wellington $420,000 and Waikato/Bay of Plenty $340,000.
Compared to November 2012 Taranaki recorded the largest increase in median price, up 16.3%, followed by Central Otago Lakes with 15.3% and Auckland with 14.8%. The REINZ Stratified Housing Price Index, which adjusts for some of the variations in the mix that can impact on the median price, reached a new high in November and is 9.6% higher than November 2012.
The Auckland, Wellington, Christchurch and other South Island indices all recorded new highs in November as well. The Auckland Index has risen 14.9% compared to November 2012, with the Christchurch index up 12.2% and the Wellington Index up 6.2%.
Houses took the same number of days to sell in November compared to October at 31 days. Compared to November 2012, the number of days to sell improved by two days. Six regions saw an improvement in the number of days to sell between November 2012 and November 2013, with Northland recording the largest improvement of 15 days, Taranaki saw an improvement of four days and Waikato/Bay of Plenty saw an improvement of three days.
For the month of November, Canterbury/Westland recorded the shortest days to sell at 27 days, followed by Wellington at 29 days, and Auckland at 30 days. Central Otago Lakes recorded the longest number of days to sell at 49 days, followed by Manawatu/Wanganui with 44 days and Northland and Hawkes Bay with 43 days. Over the past 10 years the median days to sell for the month of November has averaged 34 days across New Zealand.
This article was republished with permission from Property Wire.