New Zealand residential property market saw strong end to 2017

The property market in New Zealand ended 2017 strongly with house prices up 5.8% year on year in December, the latest index data shows.

This took the median house price to $550,000, according to the index from the Real Estate Association of New Zealand (REINZ).

When Auckland is excluded the figures show that prices for the rest of the country increased by 6.6% to $450,000. While in Auckland prices increased 1.8% to $870,000.

Overall 13 out of 16 regions saw prices increase in December, with three of those regions experiencing record prices, In Waikato they increased by 11.7% year on year to $525,000, in Bay of Plenty there was a rise 20.4% year on year to $598,000 and in Wellington up 4.7% to $560,000.

Three regions saw a price decrease year on year. In Marlborough they fell 2.1% to $372,000, in the West Coast down 1.6% to $185,000 and in Canterbury prices were down 0.7% to $439,000.

Bindi Norwell, REINZ chief executive, pointed out that median house prices across New Zealand have increased $30,000 since the same time last year and this increase has defied the predictions of many commentators who 12 or 13 months ago were adamant that house prices would fall in 2017.

‘While the increase will be welcome news to those looking to sell their property, for those first home buyers this will not have been what they were hoping for. Although there is some hope as the rate of price increases has decreased significantly compared to previous years meaning that if the trend continues, there is more of a chance that those saving for a house deposit can keep up with increasing property prices,’ she explained.

She also pointed out that in Auckland it is the first time that all seven districts have had a median price of in excess of $700,000 highlighting how expensive the city is becoming. Additionally, North Shore City has reached a record median price of $1,113,000.

The index also shows that sales across New Zealand decreased by 10.1%. Excluding Auckland sales decreased by 11.6% and in Auckland sales decreased by 6.4%. Nelson was the only region to experience an increase year on year.

The biggest fall in sales was a decline of 30.6% in Gisborne, in Northland sales fell by 23.4%, Southland they fell by 21.4% and in West Coast there was a decrease of 20.6%.

‘December represented a continuation of the theme we have seen throughout 2017, whereby the number of properties sold across New Zealand decreased every month when compared with the same month in 2016,’ said Norwell.

‘It’s a tough comparison, because 2015 and 2016 were very strong years for the industry, and set quite a high bar, so any comparison was always going to be more moderate beside these outlier years,’ she explained.

However, a number of areas that saw an increase in the number of properties sold. The Rangitikei District saw a 90.9% volume increase year on year, the Buller District saw a 50% increase, Auckland’s Franklin District saw a 41.4% rise and Waitaki District saw a 32.4% increase in sales.

‘When looking at the seasonally adjusted sales volumes in December when compared to November, the figures are far more positive, showing that sales volumes were actually higher than we would anticipate for this time of year,’ Norwell added.