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NZ house sales flat in July as Auckland market settles, prices gain

Wednesday 15th August 2018

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New Zealand house sales were largely flat in July as activity in the dominant Auckland market settled down in what's typically the quietest winter month. 

The number of houses sold across the country rose to 5,661 in July from 5,619 in the same month a year earlier. Turnover in Auckland was up 2.1 percent to 1,712 on the same basis, the Real Estate Institute said. The house price index rose 4.9 percent to a new national record, and excluding Auckland climbed 8 percent as the country's largest property market continued to slow. 

Chief executive Bindi Norwell said a shortage of housing pushed up prices in regions outside Auckland, with the national inventory shrinking 3.8 percent to 21,288, the lowest level in a year. 

"The shortage of properties available for sale across the country is continuing to push prices up in all regions across the country except for Auckland," Norwell said. "With July producing another four regions with record median prices we desperately need to increase the supply of new houses – be that through KiwiBuild or from private developers and builders – in order to fill the significant shortage of properties around the country."

New Zealand's housing market has slowed after rapid price gains fuelled by cheap credit and an expanding population were restrained by tighter lending criteria and policy efforts to crimp demand and stoke new construction. Reserve Bank governor Adrian Orr this week told TVNZ1's Q+A programme there's a chance prices may fall in Auckland from levels he said were "highly elevated" relative to income. 

Auckland was the only region to register a decline in the median sale price from a year earlier, with prices dipping 0.1 percent to $835,000. That compares to a national gain of 6.2 percent to $550,000. The biggest increase was on the West Coast, where the median sale price jumped 31 percent to $225,000, still the lowest across the nation. Taranaki prices rose 15 percent to $375,000 and Nelson prices were also up 15 percent to $547,000. 

Still, the Real Estate Institute said Auckland's observed median price decrease since June was fractionally smaller than expected, while the observed decrease in sales count was greater than expected.

The median number of days to sell increased to 37 days in July, one more than the same month a year earlier. That was weighed by Auckland where it took 41 days, four days longer to sell than in July 2017.  

The rising median sale price meant fewer properties sold for less than $500,000, with 2,402 affordable properties changing hands, compared to 2,687 a year earlier. The number in the lower mid-range band of $500,000 to $750,000 rose to 1,715 from 1,516, while upper mid-range sales between $750,000 and $1 million climbed to 807 from 687. The number of top end of $1 million-plus properties sold increased to 737 from 729. 

Norwell said the West Coast, Southland and Manawatu/Whanganui were the most affordable places for buyers of properties below $250,000.  

(BusinessDesk)

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