Wednesday 14th September 2016
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New Zealand house prices continued to advance in August, with both Auckland and the Nelson/Marlborough region hitting new records, as the number of properties put up for sale declines, according to the Real Estate Institute of New Zealand.
The national median house price advanced 5.8 percent to $492,000 in August from the same month a year earlier, the institute said. There were 7,527 sales in August, down 3 percent on a year earlier, and the number of houses available for sale shrank by 18 percent.
“The underlying trends indicate that the struggle for stock is the single biggest factor driving market behaviour and price expectations across the country, as we await spring listings," institute spokesman Bryan Thomson said in a statement. “We have been highlighting the lack of inventory for some time, and it continues to be a major contributing factor in the volume of sales across all regions. This is particularly so in Auckland, where inventory levels are at historic lows.”
New Zealand's bubbling housing market may pose a risk to the country's financial system with the cost of servicing increasingly large mortgages stoking Reserve Bank concerns about household balance sheets, prompting tighter restrictions for highly-leveraged lending to property investors. One of the central bank's biggest concerns has been Auckland where a lack of housing coincided with a record net inflow of new migrants, pushing up prices faster than elsewhere. Today's data show the median Auckland sale price jumped 14 percent to a new record $842,500, while sales volumes were down by about 20 percent at 2,413.
Prices also hit a new record in the Nelson/Marlborough region, gaining 12 percent to $430,000, while volumes advanced 12 percent to 259.
Prices gained the most in Central Otago Lakes, up 41 percent to $650,000, while volumes increased 27 percent to 137, followed by the Waikato/Bay of Plenty region, rising 23 percent to $435,000 from a year earlier, with a 6.8 percent fall in sales to 1,386, and Manawatu/Wanganui where the price increased 15 percent to $246,500 as sales gained 35 percent to 418.
In Wellington, the median price jumped 15 percent to $461,000 as the volume increased 14 percent to 765. The Wellington region has the lowest level of properties available, with just seven weeks supply, according to the institute's estimate.
In the Canterbury/Westland region, prices lifted just 1.9 percent to $420,000 as the volume gained 5.9 percent to 914. In Taranaki, prices advanced 8.8 percent to $310,000, as the volume gained 13 percent to 188. For the Hawke's Bay region, prices advanced 12 percent to $320,000 as the volume edged up 2.4 percent to 261. Meanwhile, prices in the Northland region rose 12 percent to $362,000 as the volume advanced 3.5 percent to 267.
The institute noted that section sales, which are exempt from tighter bank lending restrictions, jumped 37 percent from a year earlier, which is likely to stoke growth in building consents and bodes well for growth in housing supply.
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