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Mild winter spurred more August house sales, REINZ says

Thursday 13th September 2018

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New Zealand house sales were spurred by a mild winter chill in August across most of the nation, the Real Estate Institute says. 

The number of houses sold rose to 6,216 in August. 3.1 percent more than a year earlier, as increased turnover in the provinces made up for fewer deals in Auckland and Wellington. Southland led gains with 182 sales, up 24 percent from a year earlier, while Taranaki house sales rose 23 percent to 185. Auckland sales slipped 2.4 percent to 1,792, or 29 percent of national sales, while Wellington dipped 0.6 percent to 621, or 10 percent of turnover. 

The house price index was unchanged in the month, holding at a record high and up 4.1 percent from a year earlier. Prices in Manawatu-Whanganui rose at the fastest annual pace, up 17.2 percent, while Southland prices were also up 16.9 percent. Auckland house prices edged up 0.2 percent on the index, Wellington gained 9.8 percent, and Canterbury increased 1.2 percent. 

"Above average temperatures for New Zealand in the final month of winter has had a positive impact on the real estate industry with prices increasing in 14 out of 16 regions across the country," REINZ chief executive Bindi Norwell said in a statement. "The middle of the North Island and top of the South Island continue to see strong prices achieved as low listing numbers continue to drive prices upwards in these popular areas." 

New Zealand's property market has shown signs of re-emerging life after the Reserve Bank eased restrictions on highly-leveraged mortgage borrowing and expected higher interest rates didn't emerge. That's been encouraged by lenders' willingness to back the government's KiwiBuild policy, with Kiwibank pitching loans to first-home buyers with less than a tenth down as a deposit. 

Housing Minister Phil Twyford today announced the ballots for 25 apartments in Onehunga in the first KiwiBuild development to buy off the plans. Six studio apartments will be priced from $380,000, 12 one-bedroom units from $490,000 and seven two-bedroom units at $600,000. Construction starts today and is scheduled to be completed next August. 

"This is a unique opportunity for those who have been locked out of the property market to buy a modern, new home in an increasingly popular area that might otherwise have been out of reach for first home buyers,” Twyford said.

Of August's house sales, 2,732, or 44 percent, were in the affordable bracket below $500,000, compared to 2,770, or 46 percent a year earlier. Properties between $500,000 and $750,000 accounted for 28 percent of total turnover, while $750,000 to $1 million made up 15 percent. Sales worth more than $1 million accounted for 13 percent of activity. 

Kiwibank economists Jarrod Kerr and Jeremy Couchman said in a note that today's data showed national sales activity was "in a goldilocks phase – not running too hot, and not running too cold either". While Auckland remained in "neutral", other regions appeared more resilient. 

Today's REINZ figures show national inventory shrank 1.6 percent to 21,207 in August from a year earlier; days to sell were unchanged at 37. 

The national median sale price rose 3.6 percent to $549,000, with Auckland prices up 1.4 percent to $852,000. 


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