Number of homes for sale in New Zealand falls substantially
The number of properties sold across New Zealand in July fell by 24.5% year on year, the lowest number of transactions since August 2014, the latest index shows.
The figures from the Real Estate Institute of New Zealand (REINZ), also shows that sales fell by 30.6% in Auckland fell by 30.6% with access to finance amid tighter lending criteria regarded as reasons for the declines.
‘The number of sales across New Zealand has dropped significantly in comparison to the same time last year. A key reason for this is that the two biggest hurdles to purchasing a house right now are access to finance as the banks continue to tighten their lending criteria and LVR restrictions,’ said Bindi Norwell, Chief Executive, REINZ.
[This creates an intimidating barrier to entry to the real estate market, particularly for those saving for their first home. No matter where we are in the country, agents tell us that there are a good number of buyers out there, but that these two issues are impacting both investors and first time buyers alike. When you throw in an election, winter, school holidays and one of the wettest Julys on record, it’s little wonder the number of properties sold last month fell so significantly,’ she pointed out.
The index, which measures the changing value of property in the market, showed that the value of homes in New Zealand overall increased by 1.2%. Excluding Auckland, national values increased by 7.5%, whereas in Auckland prices were down by 2.1%.
Compared to a year ago, median house prices for July increased in all but four regions across the country. While Auckland was down 1.2% to $830,000, the Bay of Plenty was also down 1.2% to $489,000, the West Coast down 23.5% to $195,000 and Canterbury down 2.3% to $420,000.
The national median price increased by 3.4% year on year to $518,000, up from $501,000, and the national median price, excluding Auckland, increased 6.1% to $415,838 year on year.
Four regions also experienced record median annual price growth with Northland up 23% to $455,000, Hawke’s Bay up 25.8% to $400,000, Nelson up 20.2% to $493,000 and Otago up 15.3% to $400,000.
‘With the majority of the country experiencing price rises and four regions experiencing record prices, it shows that demand is still strong across significant portions of the country. Most notably this growth is seen in provincial towns rather than the bigger cities, much of this can still be attributed to people looking to exit the bigger cities for more affordable and relaxed lifestyles,’ Norwell explained.
‘While the median house price for Auckland has fallen slightly, the housing shortage coupled with the increased population growth means the city is likely to be protected from significant price decreases in the short term,’ she added.
The median number of days to sell a property nationally increased by four days from 31 to 35 when compared to July 2016. Regionally, Nelson had the shortest number of days to sell at 24, followed by Wellington at 28 and Otago and Southland both on 29.
Property on the West Coast took the longest to sell at 111 days but this is a significant drop on the 162 days it took in July last year, followed by Northland on 46 and the Bay of Plenty on 45.
The number of properties available for sale nationally rose by 7% year on year and in the Auckland region increased by 49%. Excluding Auckland, the number of properties for sale fell by 8%, highlighting the impact Auckland has on the overall picture.
Compared to July 2016, the number of listings rose 19% in Waikato, 11% in Wellington and 10% in the Bay of Plenty. The regions with the biggest decrease in inventory were Southland down 32%, Otago down 25% and the West Coast down 23%.
‘Auckland is not short of properties available for sale, given that the number of properties available has increased by nearly half. The issue is purchasers being hamstrung by finance and LVR restrictions. However, in the lower South Island, listings are down making it even harder for investors and first time buyers to compete for properties,’ Norwell concluded.