NZ house prices hit new record; Auckland growth slows while other regions soar

Thursday 13th October 2016

New Zealand's median house price hit a new record in September as Auckland's growth slowed while six regions hit all-time highs, according to the Real Estate Institute of New Zealand.

The national median house price rose 6.3 percent to $515,000 in September from the same month a year earlier, ahead of the 5.8 percent pace in August, the institute said.

Concern about New Zealand's bubbling housing market has prompted policymakers at the Reserve Bank to introduce tighter restrictions for highly-leveraged lending. 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, which has been pushing up prices faster than elsewhere. However today's data show the median Auckland sale price advanced 7 percent to $825,000 in September from a year earlier, slower than August's 14 percent annual pace of growth, and weaker than August's $842,000 median price.

Meanwhile, prices hit a new record in Northland, up 15 percent to $390,000; Waikato/Bay of Plenty, up 18 percent to $458,500; Taranaki, up 15 percent to $350,000; Wellington, up 16 percent to $480,000; Nelson/Marlborough, up 22 percent to $450,000; and Otago, up 5.7 percent to $296,000. Prices gained the most in Central Otago Lakes, up 41 percent to $694,500.

"The real estate market in New Zealand appears to be in something of a two-speed mode at present, with Auckland pausing for breath during a wet school holiday period and ahead of likely new spring growth," said institute spokesman Bryan Thomson. "Meanwhile, across the rest of the country prices continue to rise, still demonstrating strong price and volume growth.”

Thomson said first-home buyers in Auckland appear to favour new builds as a way of getting finance in light of the central bank's new loan-to-value restrictions, which exclude new home construction.

There were 7,397 national sales in September, down 2 percent from August, and 10 percent lower than September last year. Sales in Auckland declined 23 percent from September last year, the institute said.

The number of properties available for sale nationwide shrank by 20 percent compared with September last year. Wellington has the fewest properties for sale with an estimated seven weeks of supply, while Auckland was the only area which saw an uptick in the level of inventory with an estimated 12.5 weeks of supply.

BusinessDesk.co.nz

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