13 July 2017
For immediate release
REINZ statistics: Auckland price growth slowing, regional strong growth continues
New Zealand’s property market is showing all the signs of being a two-tier market with Auckland median house price
increasing 2.5% year-on-year, but the rest of the country (excluding Auckland) showing growth of 11.4% year-on-year
according to the latest data from the Real Institute of New Zealand (REINZ) – source of the most complete and accurate
real estate data in New Zealand.
Auckland’s median price increased to $850,500 (up from $830,000 in June 2016) and the national median excluding Auckland
increased to $431,000 (up from $387,000).
The REINZ House Price Index (HPI) for June 2017 further supported this trend indicating that Auckland house prices have
decreased slightly by -0.6% year-on-year but the rest of the country (excluding Auckland) showed growth of 9.2%
year-on-year. Nationally, the HPI showed an increase of 2.8%.
Bindi Norwell, CEO, REINZ says: “While median prices in Auckland have increased slightly year-on-year, the City of Sails
had the second lowest rate of growth in the country in comparison to the 8% seen in June 2016 and 27.1% increase seen in
June 2015. This is evidence that the ‘Supercity’ has showed signs of price growth slowing down – if you look at the
month-on-month figure it shows a drop of -0.8%.
“However, most regions across the rest of the country experienced double-digit (or close to it) growth and record median
prices have been seen in three regions this month – Bay of Plenty ($555,000), again in Manawatu/Wanganui ($280,000) and
Tasman ($581,000) highlighting the buoyancy across the rest of the country and the normal property cycle where regions
are typically behind Auckland in terms of the growth curve,” continues Norwell.
Volumes down
Sales volumes across the country have continued to decline – in Auckland they are down -33.2% for the year to June and
nationally they’re down -24.7% for the same period. The regions that experienced increased volume this month were Tasman
(which saw an increase of 25%) and the West Coast (a 3% increase year-on-year).
“We know that it’s winter and the election is just two months away now which typically impacts the number of properties
sold in the market. The number of properties sold across the country is the lowest we’ve seen in the month of June for
three years now – particularly in the $500,000 and under property price bracket,” says Norwell.
“This slow-down in transactional activity, but stabilising price trend highlights the underlying dynamics between
housing demand and housing supply, with population growth continuing to rise faster than building consents and dwelling
supply,” she continues.
Days to sell up
The median number of days to sell a property nationally increased by 5 days – from 31 to 36 days in comparison to June
2016. Regionally, Hawke’s Bay again had the shortest number of days to sell (28), followed by Wellington and Southland
(both on 31 days) and property on the West Coast took the longest number of days to sell (128), followed by Northland
(47 days) and Bay of Plenty (41 days). In Auckland, the number of days to sell increased by 7 days year-on-year (from 31
to 38 days).
So, what does it all mean?
“The June figures show us that a number of things are happening across the residential real estate market – inventory
levels are impacting pricing, LVRs are having a significant impact in terms of buyers’ ability to purchase properties
(particularly for first time buyers) and that the major trading banks are being more cautious with their approach to
lending particularly their view of how highly leveraged Kiwis are when it comes to properties.
“Talk of a decline in prices may be premature with the seasonally adjusted median price trends still rising across many
regions in New Zealand. The Auckland market is the most mature in terms of the property cycle, however, at worst, prices
in the Auckland region are steady at present. The data also shows an emerging trend of section sales in Auckland
occurring more quickly than dwelling sales, highlighting that demand for sections is still rising in Auckland while
demand for dwellings is easing,” continues Norwell.
“With the looming election, Auckland prices are showing all the signs of stabilising that we would normally expect and
we anticipate this being a similar trend over the coming months until the election is over,” concludes Norwell.
Inventory
The number of properties available for sale rose by 1,895 in June compared to 12 months ago, although the number of
properties for sale in the Auckland region has increased by 3,097 (57%) providing more choice to buyers. Excluding
Auckland, the number of properties for sale fell by 1,203 (-7.4%). Compared to June 2016 the number of listings rose
4.4% in Canterbury, 5.0% in Wellington and 4.5% in Waikato. The largest declines occurred in Northland (-367),
Manawatu/Wanganui (-353) and Southland (-269).
Auction numbers continue to fall
The number of properties sold by auction continues to decline across New Zealand with 828 auction sales in June
representing 14% of all sales. This compares to 24% of all sales in June 2016 and 13% in May. For the year to June, the
number of auctions has declined by 27%, or 5,706 sales.
Price Bands
Between June 2016 and June 2017, the number of homes sold for more than $1 million fell by 29% to 779 homes to equal
13.2% of all dwellings sold. The number of dwellings sold under $500,000 has declined by 1,153 between June 2016 and
June 2017 compared to a fall of 1,938 for all dwellings or a decline of 24.7%.
ENDS
Notes to Editors
The monthly REINZ residential sales reports remain the most recent, complete and accurate statistics on house prices and
sales in New Zealand. They are based on actual sales reported by real estate agents. These sales are taken as of the
date that a transaction becomes unconditional, up to 5:00pm on the last business day of the month. Other surveys of the
residential property market are based on information from Territorial Authorities regarding settlement and the receipt
of documents by the relevant Territorial Authority from a solicitor. As such, this information involves a lag of four to
six weeks before the sale is recorded.
ends