Property prices in New Zealand fell in two regions year on year in September

Residential property prices rose in every region of New Zealand year on year apart from Auckland and Nelson, the latest index data shows.

Nationally, the median price rose by 3.9% year on year to $530,000. However, median prices in Auckland fell by 3.2% year on year to $850,000, the biggest fall since December 2010.

This took the median house price for New Zealand, excluding Auckland, to a record price of $440,000, an 8.5% increase, according to the figures from the Real Estate Institute of New Zealand (REINZ).

A breakdown of the figures show that prices increased by 14.4% in Otago to $412,000, by 11.5% in Manawatu/Wanganui to $290,000, by 9.9% Waikato to $500,000 and by 4.7% in Canterbury to $450,000.

Apart from Auckland the only other region to see prices fall was Nelson with a decrease of 6.8% to $447,500, the biggest drop there since April 2012.

‘As we’ve seen for some months now, prices across the country have continued to increase, albeit at a slower rate than the increases we’ve seen in some regions for the last couple of years. Waikato is now the sixth region in the country to have exceeded the half a million dollar mark at least once, something, that a few months ago, we predicted would happen shortly,’ said Bindi Norwell, REINZ chief executive officer.

She explained that the Auckland Region’s decrease of 3.2% year on year is predominantly the result of a large number of apartments being sold in the old Auckland City boundary which has therefore brought the median price down for the entire region.

Auckland City’s median fell by 17% to $850,000, the lowest price it’s been for 16 months but Norwell noted that Franklin District prices increased 16% year on year to $737,000 and North Shore City remains New Zealand’s only million dollar plus city.

The index also shows that the number of properties sold across New Zealand was down 16% year on year and excluding Auckland, were down 14% year on year. Sales were down by 31% in the West Coast, down 24% in Manawatu/Wanganui, and down 21% in Auckland, Northland and Bay of Plenty.

Norwell pointed out that for the last three months, not a single region in New Zealand experienced an increase in sales volumes year on year but in September sales increased in Gisborne and Southland, up 8% and 1% respectively, suggesting that the traditional spring rise in activity is starting.

Indeed, month on month sales are stronger with half of the 16 regions covered by the index seeing a growth in transactions. Compared with August sales increased by 45% in Marlborough, by 18% in Wellington and by 7% in Nelson.

‘However, it’s clear that the volume of properties sold across the country is still significantly lower than it was this time last year. Therefore, we welcome the Reserve Bank’s comments last week that they will make an announcement later this month around reviewing the restrictions and the criteria that they would adopt for the removal of LVRs,’ said Norwell.

‘This data is evidence that the LVR restrictions have done their job of slowing the market, which is why REINZ has repeatedly called for LVRs to be reviewed for first time buyers,’ she added.

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