Home prices reach a record high in New Zealand, led by regional growth
Record residential property prices in New Zealand are being driven by regional growth with the annual value up 1.8% in March to a high of $560,000, the latest index data shows.
But when Auckland, where prices fell, is excluded, the median price increased by 6.2% to a record high of $460,000, according to the figures published by the Real Estate Institute of New Zealand (REINZ).
Additionally, three regions achieved record prices. In Gisborne they increased by 17.9% to $330,000, in Hawke’s Bay up 11.7% to $445,000 and in Wellington up 10% to $583,000. Other regions that saw strong increases in price during March were Manawatu/Wanganui up 12.3% to $292,000 and Otago up 11.1% to $405,500.
Prices in Auckland fell 2.2% year on year to $880,000 but this was compared to March 2017 which saw the region experience the record price of $900,000. However, month on month prices in Auckland increased 2.9%.
‘March was a very strong month from a price perspective with record prices achieved for New Zealand excluding Auckland, Gisborne, the Hawke’s Bay and Wellington. Looking at the whole country, median house prices increased in 13 out of 16 regions,’ said Bindi Norwell, REINZ chief executive.
She pointed out that it is the third month in a row now that the Hawke’s Bay has seen a record median price for the region and said that this has been driven by a high level of demand across the region which is driving prices up particularly in Nelson Park in Napier with growth of 27.7%, Ruataniwha in Central Hawke’s Bay up 25.8% and Heretaunga in Hastings up 24.7%.
She also pointed out that as New Zealand’s second largest city, Wellington is regarded as an attractive place to live with much of the growth being driven by areas such as South Wairarapa’s Martinborough with price growth of 57.4%, Porirua East up 48%, Carterton up 27.3% and Upper Hutt City up 25.6%.
The index also shows that sales across New Zealand fell by 9.9% when compared to March 2017 but that month had the highest for sales volume in 2017. ‘This is just one month’s worth of data following two solid months of sales, so we’re not overly concerned about this month’s volume. We’ve seen a number of the regions post stronger results than some of the major centres, highlighting the buoyant economies in these areas,’ said Norwell.
Most notably sales increased by 18.9% in the West Coast, its highest number for six years for the month of March, in Gisborne sales were up 8.7%, its highest level since May 2016, and in Nelson sales were up 7.1%.
The biggest fall in sales in the regions was a decline of 19.1% in Otago, while sales were down by 17.7% in Wellington and by 14.7% in Manawatu/Wanganui while the number of properties sold in Auckland decreased by 12%.
The figures show that supply increased marginally by 1% year on year but some regions saw inventory rise, including an increase of 13.5% in Nelson, up 9% in Waikato and up 6% in Auckland. The number of homes for sale fell by 15.3% in Southland, by 13.4% in West Coast, by 9.1% in Wellington and by 8.7% in Taranaki.
Highlighting the lack of inventory across the country, Norwell pointed out that the Wellington region only has seven weeks’ inventory available to those looking to purchase in the area and the Hawke’s Bay only has nine weeks of inventory.