Residential sales failed to increase across New Zealand in August, latest index shows

Not a single region in New Zealand experienced an increase in the number of properties sold during August 2017 compared to the same time last year, but prices are still rising, the latest index shows.

Sales across the country fell by 20%, the equivalent of 47 less properties being sold each day in August 2017 and only the third time sales have fallen nationwide in the last seven years, according to the report from the Real Estate Institute of New Zealand (REINZ).

The biggest fall in sales activity was in Southland with a drop of 37.3%, followed by Northland down 29.4%, Taranaki down 25.9%, Waikato down 25% and Auckland down 21.5%.

‘We’ve seen the number of properties sold across the country drop significantly. The drop in volume this month meant that, on average, 47 fewer properties were sold each day in August 2017 in comparison to August 2016, that’s a big drop,’ said Bindi Norwell, REINZ chief executive.

She pointed out that banks’ lending criteria and LVRs are still impacting first home buyers and investors. ‘If you looked at the number of properties sold, without looking at the bigger picture, one might assume that the market was showing significant signs of slowing,’ she explained.

‘However, as prices are holding up, and even increasing, then it suggests that people may be holding off from selling their property unless it’s absolutely necessary,’ she added.

The data shows that prices across New Zealand increased by 8.2% year on year to $530,000. Nationally, excluding Auckland, median prices increased 10.9% year on year and Auckland median prices decreased by 1.2% year on year.

However, on a month on month basis, Auckland’s median price increased by 1.2% or by $10,000. Contributing to the overall increase, five regions across the country experienced record median prices in August year on year.

A breakdown of the figures show that in Southland prices were up 22% to $250,000, in Nelson up 12.6% to $518,000, in Hawke’s Bay up 19.1% to $405,000, in Manawatu/Wanganui up 18.8% $285,000 and in Marlborough up 16.7% to $420,000.

In August, a fifth region has exceeded the median house price of half a million dollars for the first time. Nelson, with a median price of $518,000, now joins Auckland, Bay of Plenty, Wellington and Tasman as a region that has had a median sales price over this price mark at least once historically.

The data also suggests that the Waikato is not too far away from reaching this milestone, with four of the last five months having median prices in the $480,000 bracket.

The REINZ House Price Index, which measures the changing value of property in the market, showed that the value of dwellings in New Zealand overall increased by 0.5%. Excluding Auckland, national values increased by 7%, whereas in Auckland dwelling values decreased by 2.9%.

The median number of days to sell a property nationally increased by seven days to 37 when compared to August 2016. Regionally, Waikato saw the biggest increase in the number of days to sell with a rise of 11 days to 39, followed by Northland up 10 days to 47, Taranaki up 10 days to 45 and Auckland up nine days to 40. Only two regions saw a decrease in the number of days to sell. West Coast was down 45 days to 79 the lowest in five months, and Southland down two days to 37.

The number of properties available for sale nationally increased by 0.4% from 21,462 to 21,555 compared to 12 months ago, whereas the number of properties for sale in the Auckland region increased by 27.3% year on year from 6,073 to 7,731.

Excluding Auckland, the number of properties for sale fell by 10.2% from 15,389 to 13,825, highlighting the impact Auckland has on the overall picture. In addition to Auckland, only two other regions experienced an increase in listings with Waikato up 10.9% and Wellington up 10.6%. The regions with the biggest decrease in inventory were Gisborne down 29.5%, Southland down 28.3% and Marlborough down 25.2%.

Inventory continues to remain an issue for a number of regions, with Wellington, Nelson and Hawke’s Bay all having less than 10 weeks’ inventory available. ‘Despite the decrease in the number of properties sold, overall, the market is in a strong position as listings remain low and demand for good properties remains high. Agents across the country expect the market to pick up as we move into Spring and even more so once the election is over,’ said Norwell.