Median house prices firmed and sales rose strongly across New Zealand during March, which is traditionally the busiest month for property market activity, the latest index shows.
The national median price rose $51,000 to $546,000 during March, an increase of 10% on February and a new record median, while most regions, including Auckland, Northland, Hawke’s Bay, Manawatu, Taranaki, Canterbury and Otago recorded new record high median sale prices.
On a seasonally adjusted basis the national median rose 2% while the number of sales for March were up 36% month on month but down 11% compared to March 2016. On a seasonally adjusted basis sales for March rose 2% compared to February, indicating an expected seasonal effect.
‘March reflects the seasonal peak for the year so far, with the largest number of homes sold and the largest month on month increase in the median price, as we normally expect to see this month,’ said Real Estate Institute of New Zealand (REINZ) chief executive officer Bindi Norwell.
‘Auckland has recorded another record median price and a 66% jump in sales volumes on February, but it should be noted that the March effect is more pronounced in Auckland than in other regions. Further, the level of inventory in Auckland are rising quickly with 47% increase in inventory over the past month, offering buyers more choice,’ Norwell added.
REINZ has also released a new house price index developed in partnership with the Reserve Bank of New Zealand which provides a new level of detail and understanding of the true movements of housing values over time.
It does this by analysing how prices in a market are influenced by a range of attributes such as land area, floor area, number of bedrooms etc. to create a single, more accurate measure of housing activity and trends over time.
When applied to the March data, the new index indicates that the lift in the median price was largely driven by changes in the underlying mix of homes sold in March compared to February. While the median price went up $51,000 across New Zealand, the index was unchanged month on month, indicating more sales in higher price brackets than lower ones.
REINZ says that the index numbers are backed by anecdotal evidence from around the country saying that investors and first home buyers are facing more challenges in securing bank lending compared to this time last year, which is lowering the number of homes sold in the lower price bracket.
The REINZ report says that as a result, there are comparatively more sales in higher price brackets, which is lifting the median price. Although this gives the overall impression of rising prices, the underlying data shows that the median is moving more due to differences in the mix of dwellings being sold each month.
Year on year, the index indicates that activity nationwide was up 10%, up by 8.3% in Auckland and by 13% outside Auckland by 13%. Sales increased by 36% compared to February but were down 11% year on year. On a seasonally adjusted basis, the number of sales rose 2% from February to March, indicating that the lift in sales was largely a seasonal effect, with March traditionally the busiest month of the year.
Northland recorded the largest percentage increase in median price compared to March 2016, at 27%, followed by Hawke’s Bay at 24% and Taranaki at 18%.