Auckland house prices up 26% in June year, buyers looking further afield: REINZ

Monday 13th July 2015

New Zealand house sales and median prices rose in June, with Auckland's median house price rising a record 26 percent to $755,000 over the past year, amid signs that supply shortages and surging prices in the country's largest city may be prompting buyers to look elsewhere.

The number of houses sold nationwide increased 29 percent to 7,426 in June compared with the same month a year earlier, according to the Real Estate Institute of New Zealand. Excluding Auckland, sales jumped 35 percent.

The national median price increased 5.4 percent to $450,000 in June compared with the same month a year earlier. Auckland's median price surged 26 percent to a record $755,000, while outside of Auckland the median price was steady at $340,000.

The Auckland property market has been a concern for policymakers due to its supply imbalance, and the Reserve Bank plans to impose lending restrictions on property investors from October, while the government has tasked its tax collection agency to police capital gains more forcefully.

New requirements that all second home buyers must supply a local bank account and New Zealand taxpayer number "may be having some impact at the top end of the market, but for the bulk of the market the trends evident over the past 12 months show no signs of abating,” said REINZ chief executive Colleen Milne. Legislation requiring that change has yet to be passed and will only apply from Oct. 1.

Labour Party analysis of leaked sales data, said to be from a large Auckland real estate firm, caused controversy over the weekend by claiming close to 40 percent of the sales appeared to be to buyers with what appeared to be Chinese surnames, prompting accusations of political point-scoring based on crude racial profiling.

Figures released by Quotable Value earlier this month showed house values in Auckland city jumped at their fastest pace in more than a decade in the year through June, prompting house hunters to spread their net wider, pushing up values in surrounding areas.

"There is increasing evidence that Aucklanders are looking out of the region for properties, both as owner/occupiers and for investment properties," said Milne. "Regions such as Northland and Waikato/Bay of Plenty have recorded significant drops in the volume of properties for sale over the past six months, with Aucklanders increasingly being identified as a significant buying group in these regions. Further afield, there is increasing evidence that Aucklanders are making up a larger portion of total buyers.”

Milne said prices were continuing to rise in Auckland, where inventory was tight, with less than 10 weeks of stock available.

"The Auckland region continues to experience low listing numbers and strong demand across the spectrum," Milne said. "Although some vendors are leaving Auckland, there are as many new buyers emerging, leaving the overall supply/demand situation more or less static."

In Northland, sales volumes rose 61 percent in June from the year earlier month, while the median price increased 6.8 percent to $315,000 with increased interest from Auckland buyers.

In Waikato/Bay of Plenty, sales volumes jumped 74 percent from the year earlier month, while the median price increased 3.2 percent to $346,750, with increased buyers from Auckland.

In Hawkes Bay, sales volume rose 43 percent while the median price advanced 3.1 percent to $280,000 as the number of first-home buyers increased while investors remained on the sidelines.

In Manawatu/Wanganui, sales volumes increased 52 percent while the median price edged up 0.1 percent to $231,250. Taranaki volumes jumped 14 percent while the median price slipped 1 percent to $303,250. In Wellington, volumes rose 24 percent while the median price edged up 1.3 percent to $390,000.

In Nelson/Marlborough, volumes rose 15 percent while the median price slipped 3.6 percent to $348,900. In Canterbury/Westland, sales volumes gained 7.4 percent while the median price edged up 2 percent to $418,000.

In the Central Otago Lakes region, volumes rose 24 percent while the median price advanced 11 percent to $512,500. In the Otago region, volumes jumped 29 percent while the median price rose 6 percent to $249,000, and in Southland volumes edged up 4.5 percent while the median price gained 24 percent to $205,000.

BusinessDesk.co.nz

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