Median house prices in New Zealand up by almost 7% in 12 months to May 2017

Median house prices across New Zealand increased by 6.7% to $540,100 in the year to May 2017, according to the latest data to be published.

Record median prices were recorded in four of the 14 regions covered by the Real Estate Institute of New Zealand (REINZ) with Northland at $450,000, Manawatu/Wanganui at $269,000, Nelson/Marlborough at $483,250 and Southland at $238,000.

Median house prices in Auckland increased by 5% year on year to $865,500 and were up 1.6% month on month, but growth is slower than a year ago.

Housing market activity nationwide was up 5% year on year with a breakdown of the figure showing it was up in Auckland by 1.8% and outside Auckland by 11.1%. However, month on month housing market activity nationwide was down 0.4%, down 0.7% in Auckland and up 0.2% outside Auckland.

According to REINZ chief executive officer Bindi Norwell, the figures show that there is strong price growth in some regions and a stable market in Auckland.

‘We are seeing a continuing trend of strong median house price growth in many of the regions year on year, however, a lack of inventory continues,’ she pointed out.

The data also shows that sales fell by 18.4% nationally year on year, down 27.5% in Auckland and down by 13.6% in the rest of the country. On a seasonally adjusted basis, this indicates a decrease nationally of 22.2% and fall of 31.2% in Auckland.

The number of properties for sale in the Auckland region increased by 47% while elsewhere they fell by 14%. Year on year listings fell 0.7% in Canterbury, 6.9% in Wellington and 6.1% in Waikato.

‘In Auckland, with sales volumes down, inventory levels increasing, the number of days to sell increasing and the level of auctions decreasing you may have expected to see prices decreasing in Auckland, however, this is not the case,’ Norwell explained.

‘This can be explained by looking at the wider fundamentals currently at play in New Zealand. Given the considerable mismatch between population growth, increasing immigration figures, low interest rates, high housing demand and low building consents and housing supply, it’s clear why prices are still rising , although at single rather than double digit growth levels,’ she said.

‘We believe that overall buyers are being more cautious. We’re heading into winter which traditionally sees a slowdown in activity, we’re in an election year, some political uncertainty globally in some of our traditional trading markets and first time buyers are finding access to capital more difficult. This goes some way to explaining the intricacies of what we’re currently seeing in the New Zealand market,’ she added.