Lack of homes for sale pushing up prices across New Zealand

A lack of homes for sale is pushing up property prices in New Zealand, with the median value up by 5.7% in June compared with the same month in 2017, the latest national index shows.

This equalled the record median price of £560,000 and when Auckland is excluded the index still recorded a national median price of $460,000, up 7% year on year, according to the data from the Real Estate Institute of New Zealand (REINZ).

However, Auckland’s median price decreased by 0.7% year on year to $850,000 while New Zealand’s most expensive three areas were Auckland with a median of $1,010,000, North Shore with a median of $975,000 and Queenstown Lake District with a median of $908,000.

Three regions saw record median prices during June with Waikato recording growth of 11.7% to $525,000, Wellington up 12.3% to $595,000 and Marlborough up 11.4% to $440,000. Additionally, regions with strong annual increases included Gisborne up 26.9% to $330,000 and Hawke’s Bay up 15.3% to $430,000.

However, the number of properties sold across the country decreased by 1.6% and the REINZ index report says that this was the result of significant decreases in sales volumes in eight out of 16 regions and a 9.9% decrease in new property listings year on year.

The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 3.8% year on year to 2,706. The HPI for New Zealand excluding Auckland increased 6.7% from June 2017 to a new record high of 2,561. The Auckland HPI increased 0.9% year on year to 2,883 showing that despite the annual decrease in median price the market is still in a strong position.

The only region not to experience an increase was Canterbury, which experienced a decrease of 1.1% year on year. Gisborne/Hawke’s Bay region had the highest annual growth rate of 14%, followed by Otago and Southland in second equal place with both regions seeing annual growth rates of 10.7%.

REINZ chief executive Bindi Norwell said that the lack of housing supply continues to put pressure on prices in the majority of regions across New Zealand, with 12 out of 16 regions seeing a price increase since June last year.

She also pointed out that there is a two tier market across the country where prices are remaining stable in Auckland and Canterbury but rising in most other parts of the country and added that a slowdown in sales is usual in the winter months.

However, sales volumes fell significantly year on year on the West Coast with a drop of 25.7% and the lowest sales count for 14 months. In Waikato sales fell by 14%, also the lowest sales count for 14 months while in Wellington a fall of 10.6% was the lowest number of properties sold for five months and Otago a decline of 8.3% was the lowest sales count for 11 months.

Despite this, there were some regions that saw a strong increase in sales including Hawke’s Bay up 23%, Tasman up 22.8% and Manawatu/Wanganui up 14.1%.

‘While the Auckland median has stabilised, we’re seeing an increase in the number of one and two bedroom houses sold and a decrease in the number of three bedroom houses as people look to downsize or get a foot on the Auckland property market. First home buyers are still dominant at open homes, especially with properties under $700,000. When the price goes above that mark, attendee numbers drop, as some may not qualify for loans above that price,’ said Norwell.

‘We are also seeing lower listing numbers, mostly due to seasonal effects. Well marketed, newly listed properties continue to get good attendance at open homes and are selling quite quickly. It also means that more vendors are choosing to go for a priced strategy as this can be an effective approach to gain interest from buyers,’ she added.