By Rebecca Howard Feb. 15 (BusinessDesk) - The number of property sales across New Zealand rose in January for the first time since June 2016 but people are taking more time to purchase, according to the Real Estate Institute.
A total of 4,366 properties were sold across the country in January, up 2.7 percent from a year earlier. In Auckland, the number of properties sold increased 0.9 percent year-on-year to 1,157. Eleven out of 16 regions experienced increases when compared to the same time last year and regions with the biggest increases were Nelson, where 78 properties were sold versus 61 in January last year and Canterbury, where 607 were sold compared to 514.
“January can often be a quiet month for the industry as people spend much of their time at the beach or the bach. However, clearly the warmer weather has helped sales," said REINZ chief executive Bindi Norwell.
The median number of days it took to sell a property - a gauge of underlying demand - increased to 46 from 41 days in January 2017, the highest median number of days it's taken to sell a property since February 2012.
Auctions were used in 6 percent of all sales across the country in January, the same percentage as January 2017, with 246 properties selling under the hammer.
New Zealand's overheated housing market - considered a risk to financial stability - has slowed as Reserve Bank restrictions on more highly-leveraged mortgage lending and tighter credit criteria being demanded by banks made it more difficult for borrowers. Housing market sentiment had also been weighed by new government policies to restrict the sale of homes and property to foreign investors.
The REINZ house price index lifted 3.4 percent year-on-year in January to 2,655. Excluding Auckland, it was up 6.6 percent on the year. Auckland's house price index increased 0.1 percent versus January 2017. The index considers the mix and value of the property sold, not just the sales price. Six regions - Northland, Waikato, Bay of Plenty, Manawatu/Wanganui, Otago and Southland - reached new highs in January, REINZ said.
The median house sale price lifted 7.1 percent to $520,000 in January versus a year earlier when it was $485,000. Auckland’s median price decreased by 1.2 percent to $820,000 down from $830,000 at the same time last year. In Otago, the median price lifted 33 percent to $475,000.
“House prices across the country continue to hold up with 14 out of 16 regions experiencing a year-on-year price increase. Otago’s record price for January was driven by a strong increase in Clutha and the Central Otago District – up 53.4 percent and 39.4 percent respectively,” says Norwell.
The number of properties available for sale nationally increased by 7 percent to 25,503 versus the prior January. Excluding Auckland, the number of properties available for sale increased by 1.1 percent to 16,824.
The number of homes sold between $500,000 and $750,000 in January represented 27.8 percent of all sales versus 25.2 percent a year earlier. The $750,000-to-$999,000 bracket lifted to 13.5 percent from 12.9 percent while the $1 million-to-$2 million category rose to 10.1 percent of the market from 9 percent.