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Auckland leads price rises as volumes continue to fall

NEWS RELEASE 14 November 2016

Auckland leads price rises as volumes continue to fall

Despite a nationwide drop in sales volumes, Auckland is one of four regions to hit record high median sale prices in October, while the national median price eased by $5,000 to $510,000, according to the latest figures released today by REINZ, source of the most recent, complete and accurate real estate data in New Zealand.

Data released by REINZ for October 2016 shows that Auckland’s median house price has risen 16% year-on-year to $868,000 - lifting $119,750 over the year. This rise also represents a 5% increase on September 2016, and a seasonally adjusted 4% on September (up 17% year-on-year). Three other regions posted record median sale prices in October with Northland reaching $399,000, Waikato/Bay of Plenty lifting to $460,750 and Southland equalling its record high of $225,000 reached in January 2008. At the same time, the national median price was $510,000, up 10.9% year-on-year, although down slightly (1%) on the record $515,000 in September 2016.

All of this occurred in spite of a nationwide drop in sales volumes. The number of sales for October 2016 was 6,727, a fall of 9% on September. Compared to October 2015, sales volumes nationally fell 14% with Auckland experiencing a 16% drop and Waikato/Bay of Plenty seeing a 25% decrease.

Real Estate Institute of New Zealand (REINZ) spokesperson Bryan Thomson says: “Auckland experienced a lot of strength in the upper end of the market but the lower end appears to be wavering due to the impact of LVRs. The national sales volumes fell by 14% in October compared to the same time last year and the number of properties for sale as measured by has fallen by almost 7,400 over the past year.

“Our data suggests that the impact of the revised LVR rules is having more of an effect on lower-priced sales compared to higher priced sales, with a surge in the percentage of sales over $1million and a noticeable decline in the number of sales below $400,000 compared to 12 months ago. Some of this change may be reflective of the overall uplift in prices over the past year as the market for higher-priced properties is continuing as normal, but the market for lower priced properties is becoming more difficult for both buyers and sellers.

“There is some evidence that the normal spring ‘bounce’ in the number of listings has so far been quite weak this year. One possible reason for this is that the revised rules could be making it harder for people to know whether to sell, as they wonder if there are buyers about, so they hold their properties back from the market. This could have the result that we’re seeing, which is that supply falls but the demand is still there, so prices keep rising.”

Sales volumes declining

There were 6,727 unconditional residential sales in October, a 14% decrease on October 2015 and a 9% decrease on September. On a seasonally adjusted basis, the number of sales fell 2% from September to October indicating that sales were lower than what would be expected for this time of year.

Median prices jump, led by the regions

The national median house price rose $50,000 (+11%) to $510,000 from October 2015 to October 2016. Compared to September the national median house price fell $5,000 (-1%). Central Otago Lakes recorded the largest percentage increase in median price compared to October 2015, at 42%, followed by Waikato/Bay of Plenty at 21% and Auckland at 16.%.

Auction sales up, Auckland auctions decline

There were 1,475 dwellings sold by auction nationally in October, representing 22% of all sales and a decrease of 436 (-23%) on the number of auctions in October 2015.

Transactions in Auckland represented 56% of national auction sales, with the number of auctions in Waikato/Bay of Plenty representing 18% of national auction sales. The number of auction sales outside of Auckland, Wellington, Canterbury/Westland and Waikato/Bay of Plenty increased 82% compared to October 2015.

Pressure on stock grows, inventory and days to sell falls

The number of properties available for sale across all regions in New Zealand fell 7,391 (-24%) between October 2015 and October 2016. Wellington has the fewest properties for sale with six weeks of supply, closely followed by Hawke’s Bay with under 10 weeks supply, Otago and Nelson/Marlborough with 11 weeks of supply.

The number of days to sell eased one day to 32 days compared to October 2015, although the regions have seen some significant movements with five regions seeing an increase in the number of days to sell and seven regions a decrease. Otago and Nelson/Marlborough had the shortest number of days to sell in October at 23 days followed by Wellington and Manawatu/Wanganui at 27 days.

Million dollar homes show largest increase in volumes

Between October 2015 and October 2016, the number of homes sold for more than $1m rose by 22% to 977 homes to equal almost 15% of all dwellings sold. The number of dwellings sold under $600,000 has declined by 1,216 between October 2015 and October 2016 compared to a fall of 1,111 for all dwellings.

For further data, tables and charts on prices, volumes, inventory, days to sell, auctions – and regional commentary and tables – please see the accompanying report.

- ENDS -

Full release with charts and further data: REINZ_Residential_Press_Release__October_2016.pdf

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