By Victoria Young
Aug. 13 (BusinessDesk) - Property values outside Auckland have reached a record high, the Real Estate Institute of New Zealand's (REINZ) latest House Price Index shows.
The index - which measures changing values of property in the market - rose to 2,761 in July, up 1.5 percent from a year earlier. Excluding Auckland, the measure rose to a record high, up 5.9 percent at 2,739.
The Auckland index fell 3.3 percent from a year ago to 2,789, but REINZ chief executive Bindi Norwell says the three-month trend is up 0.5 percent, showing “signs of green shoots”.
“This is the first time in eight months that we’ve seen the number of properties sold around the country increase on an annual basis suggesting that we’re starting to see some early signs of growth," Norwell said. "Some of this can be attributed to more certainty post the removal of the capital gains tax, but it’s also about pockets of renewed confidence and parts of the market finding its new normal in terms of pricing.”
Norwell added that the drop in the official cash rate last week should stoke more growth in the coming months, as will warmer weather.
The number of residential properties sold across New Zealand rose by 3.7 percent to 6,118 in July, REINZ said. Excluding Auckland, the number of properties rose 2.5 percent to 4,224 while Auckland drove the index with a 6.6 percent year on year increase to 1,894 properties sold.
Nelson had the greatest increase in annual sales volumes in July, up 25 percent to 85 houses sold - the highest July figure in four years. Going the other way, Southland sales decreased by 17 percent to 161, from 194 in the same period last year.
Inventories were slightly higher compared with the same time last year. The total number of properties available for sale nationally increased by 2.6 percent to 21,843 – an increase of 55 properties.
Meanwhile, the median number of days to sell stretched to 40 days versus 37 in July last year, however, this was faster than June’s figure of 41 days. Auckland saw the number of days to sell a property increase by three days to 44 when compared with the same time last year.
Auctions were used in 8.7 percent of all sales across the country in July with 535 properties selling under the hammer. That was down from 11.3 percent in July last year.
Meanwhile, the national median price increased by 4.5 percent to $575,000 in July, up from $550,000 percent from a year ago. Excluding Auckland, the median price was even stronger, up by 6.1 percent to $485,000.
The number of homes that sold for less than $500,000 across New Zealand fell to 39.5 percent of the market from 42.4 percent in July last year.
The number of properties sold in the $500,000 to $750,000 bracket increased to 31.3 percent in July from 30.5 percent. At the top end of the market, properties selling for more than $1 million remained flat at 12.9 percent of the market.
“This is the first time in eight months where we’ve seen increases across the country in both the number of properties sold and the median price when compared to the same time last year, suggesting that the housing market is in a stable place at the moment. With the added stimulus of the OCR drop, we expect the market to pick up even more as we head into spring,” Norwell said.