Slow increase in house prices but sales steady
Slow increase in house prices but sales stay steady
House prices continue to rise slowly and sales remain steady.
June quarterly figures from Massey University’s Real Estate Analysis Unit also show that for the first time in almost three years, seven regions saw an improvement in home affordability.
- New Zealand median dwelling price finishes quarter at an all time high of $305000.
- Provincial regions lead in quarterly home affordability improvement.
- Prices in Southland and Hawke’s Bay show little movement over the year.
- Otago replaces Taranaki as the third most affordable region.
The median dwelling price moved from $295,000 to finish the quarter at an all time high of $305000, a lift of 3.4 per cent. Massey Real Estate researcher Graham Crews says this price increase, combined with a continued upward creep in interest rates, offset a 2.3 per cent lift in wages over the quarter.
He says while house price increases have slowed in most areas, sales volumes, which had shown signs of earlier decline, had recovered by the end of the quarter. The New Zealand Home Affordability Index reflected a quarterly decline of 2 per cent.
“Earlier in the quarter the Real Estate Institute was reporting the market as ‘slipping back,’ but by the end of the quarter the mood had changed to one of ‘resilience’,” says Mr Crews. Quarterly dwelling sales of 27,312 were 4.2 per cent down on the same period last year (28,522). Sales for May were reported at 9,642, up on both April sales and on May sales last year.
In the June quarter seven of the twelve regions recorded a rise in median dwelling prices but only five recorded a quarterly decline in home affordability.
Graham Crews says regional declines were more muted than previous quarters, with Northland leading at 7.6 per cent followed by Auckland, Wellington, Otago, and Canterbury/Westland.
For the first time in almost three years seven regions recorded a quarterly improvement in affordability. In a clean sweep for provincial regions, Taranaki led at 5.8 per cent followed by Central Otago Lakes and Hawke’s Bay. Four regions also recorded a quarterly fall in median dwelling prices.
For the 16th consecutive quarter, the index reflected a 12 monthly decline in home affordability of 11.2 percent. Total sales for the year were 100,249, 3.7 per cent down on the previous year’s sales of 104,115. The median dwelling price moved up 10.9 per cent from $275,000 to $305,000.
Mr Crews says all regions, except Hawke’s Bay recorded a twelve monthly decline in home affordability but levels of decline were generally more muted than in preceding quarters. Provincial regions dominated, with Manawatu/Wanganui leading at 19.6%.
All regions reported an increase in Median Dwelling Prices over the year. North Island provincial regions were out in front with Manawatu/Wanganui in the lead at 17 per cent. Mr Crews says a slowdown in house price increases has been evident in most regions over the past year. Little change was recorded in both Hawke’s Bay and Southland.
Southland remains the most affordable region, with Manawatu/Wanganui in the number two position. Otago has replaced Taranaki as the third most affordable region. Central Otago Lakes is the least affordable region, followed by Auckland.
Change in Home Affordability in the last quarter
// Percentage Change in Home Affordability in the last 12 months
Region / Improvement / Decline // Improvement / Decline
Northland / / 7.6% // 15.3 /
Auckland / / 2.8% // 7.9% /
Waikato/Bay of Plenty/ Gisborne / 0.9 / // 17.6% /
Hawke’s Bay / 3.6% / // / 1.9%
Taranaki / 5.8% / // 10.6% /
Manawatu/Wanganui / 0.5% / // 19.6% /
Wellington / / 2.0% // 12.1% /
Kaikoura / 1.7% / // 12.8% /
Canterbury/Westland / / 0.3% // 9.9% /
Otago / / 0.9% // 16.3% /
Central Otago Lakes / 5.5% / // 6.0% /
Southland / 1.6% / // 0.5% /
New Zealand / / 2.0% // 11.2% /
The Massey University Home Affordability Report
The quarterly report is prepared by Massey University’s Real Estate Analysis Unit. It combines data on housing prices, mortgage interest rates and average weekly earnings to produce a home mortgage affordability index indicator. The survey, conducted since 1988, uses data supplied from Statistics New Zealand, the Reserve Bank and the Real Estate Institute of New Zealand.
Further information can be obtained at http://property-group.massey.ac.nz/fileadmin/research_outputs/homeaffordjuly06.pdf