House prices surged to new records from Auckland to Otago last month - REINZ

The housing market set new price records in September, with the national, Auckland, Waikato/Bay of Plenty and Otago median selling prices hitting new all time highs, according to the REINZ.

The national median selling price was $484,650 in September, up 4.2% compared to August and up 15.4% compared to September last year.

In Auckland the median price all set a new record of $771,000, up 4.2% compared to August and up 25.4% compared to September last year.

The median price for all parts of the country excluding Auckland was also at an all time high, hitting $365,000 in September which was up 4.7% compared to August and up 8.3% compared to September last year.

The number of sales was also strong, with 8174 homes selling in September, which was up 5.3% compared to August and up a whopping 38.3% compared with September last year.

REINZ chief executive Colleen Milne said there was continued evidence of Auckland investors buying homes in other regions of the country, particularly in Northland and Waikato/Bay of Plenty.

"These regions have recorded very strong sales growth so far during 2015 and this is now starting to be seen in the median price data," Milne said.

The median price in the Waikato/Bay of Plenty was $390,000 in September, up a massive 10.5% compared to August while the number of sales in the region was up 8.9% for the month.  

The forthcoming relaxation of the loan to valuation (LVR) mortgage lending restrictions for regions outside of Auckland would also have a positive effect on those markets, Milne said.

There were 1042 of homes that sold for more than $1 million in September, up 143% compared to the 428 that sold for $1 million or more in the same month last year.

Auction sales were also strong, particularly in Auckland, where auction sales accounted for more than half of all sales for the first time.

In the Wellington region the median price of $413,375 was up 2.7% compared to August and up 3.3% compared to September last year, while the number of sales was up 22.7% compared to last year.

In Christchurch the median price was $444,000 in September, up 3.3% compared to August and up 4.4% compared to September last year, while the number of sales was up 9% compared to year earlier.

In a Quickview note on the REINZ's figures, ASB economist Kim Mundy said strong migration, record low interest rates and low housing supply were supporting prices.

"On the other hand, the impact of tax changes and investor LVR loan restrictions are less certain," Mundy said.

"The pattern following the last implementation of LVR restrictions in late 2013 was a flurry of sales activity ahead of the introduction, followed by six months of weaker sales and slower price growth.

"We may see a similar pattern once the new investor measures are in place," she said.

To read  the REINZ's full report for all regions of the country, click on the link below:

PDF iconREINZ Residential Regional Commentary -September 2015.pdf

The interactive charts below show the monthly changes in the REINZ's median selling price for all regions since 2002.

No chart with this title found.

 

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35 Comments

It certainly looks like Auckland property is still a good bet. I would not buy anything in areas like the Bay of Plenty for example as it will certainly slow down there at best if the job market contracted.

Goodonya gordon ..... fill ya boots mate !! ....you say "it's a good bet", but I bet you ain't buying in Auckland at the moment, just pumpin' up the market ..... Spruik it dude !

The proof is in the figures CH, or should I say in the pudding. The Auckland market is still rising. You would be silly to be on the side lines if you are an investor.

You would be sensible to be a seller in the Auckland market right now. 2% yields are unsustainable and there is limited scope for further increases across the board, however individual investments may still prove good over the long term, it's going to be down to your stock selection.

Growth investors never do well buying at market peaks unless you go for GARP.

Calling this the market peak, brave call! Lets check back in next month.

Whether this month is the peak or not is not important, it is the fact that we are nearing a peak in the Auckland market as prices push lending to unsustainable levels. The peak is somewhere soon, and may be the starting of a flat period rather than a sharp decline anyway.

Much the same way the market peaked in 2011, 2012, 2013, 2014 & will peak in 2016?

Ah no, I never said it was going to peak in any of those past years.

It will be much as it peaked in 2007, 1997, 1988 and 1976.

This is a bit Auckland specific, the rest of the country won't see as substantial a downturn as Auckland, but the peak may hit this year or could have already passed or may be next year, but there are so many factors pointing towards an end sooner rather than later.

It's interesting that in 2008, there was still talk about the booming market even though it had turned in late 2007.

The real question is whether the ridiculously low interest rates will give the market a second wind. I am not so sure that it can in Auckland as funding investment purchases with yields of 2% is entirely unsustainable unless you are either exceptionally cash rich or using stolen money. The tighter rules squeezing out investors will seriously impact the market in due course and will have a far greater impact than rising interest rates alone would.

So we may see a strange conundrum in Auckland - super low interest rates and prices not rising substantially, which will of course prompt many to sell up.

A last gasp before the 1 October deadlines?

Note the massive jump in the average sale price in September compared to the previous 3 months. ($917k compared to $860-870k).

That tells me there was a lot of high end sales (perhaps foreign buyers getting in with their shady money before 1 Oct), hence the median is higher too.

Probably just the beginning of the end. Will make good headlines though if October figures fall (probably based on fewer top end sales...). Downturns tend to be self fulfilling, although with interest rates where they are it might take until there is an upswing in rates before the market truly shudders, so could just be a low slow grind down. Rather than a sudden derailment.

Banks began applying the 30% LVR rule to Auckland investors late August/early September, as it was originally set to apply by 1 October - the Reserve Bank subsequently pushed the commencement date out to 1 November but banks stuck with the 30% regardless. Auckland based investors with less then 30% deposit then flooded into the Waikato, BOP and Northland areas in numbers never seen before - the real estate agents in those areas are absolutely creaming it and cannot keep up with demand.
A smart move would be to now look at the Hawkes Bay and Manawatu, particularly Napier and Palmerston North and maybe into the Hutt Valley area of Wellington as those areas have not seen the impact of the Jafa investor just yet - but it is just starting to happen in those areas.
So prices look like they are increasing in Auckland but this is only due to less activity in the investor end of the market due to banks already applying the 30% rule and the data skewed by more sales of family homes above $1m. NZ median price now influenced by frenzied Jafa activity in cities outside of the Auckland area where they are paying way beyond the fundamentals - rents may actually fall as too many people from Auckland are out bidding the first home buyers in places like Hamilton and Tauranga and rental market is becoming over supplied.
So congratulations to the government and the Reserve Bank - they have set off the start of the strongest house price boom this country has ever seen - the unintended consequences of economic meddling have come back to bite them. On the Auckland front the Chinese have now disappeared from the market - scared off by the IRD/Bank account and ID requirements. There was a massive amount of turnover/trading of real estate undertaken by Chinese "under the radar" - now the government has fixed that problem.

X2 palmy.

18 sections and 160 odd properties for sale it has less supply per capita than Auckland even and is strangely free of speculation even though it's the north islands only real student city

Students wreck property

From the full report, Mt Manganui/Papamoa up 17.6% August to September seems like an almost unbelievable jump even given the Auckland investors flocking there - thoughts?

Similarly Taupo recording a 17.9% jump.

It just shows how much New Zealanders rely on and believe in property for investment. And I have to say people have done well from it generally. If you are not in there somewhere you are missing out on some retirement capital.

All the news seems very contradictory. One minute we are being told all the signs are that the market has turned, the next minute highest prices ever. Can someone explain?

It's important to note property results from QV and REINZ and Barfoot's and Trademe all have different bases and tell different stories - they are not the same - they can't be compared - however over time as they are released and overlap it can become confusing

Seems the Auckland problem is being exported to the regions, don't see how that can be a good thing. The RBNZ should have kept the LVR limits intact for a few months instead of lifting it and letting all this hot money fly out of Auckland and find homes there. It will price the locals out of the market, create unnecessary housing/rent inflation and shrink spending, how can that possibly help the regional economy. Even worse when the economy deteriorates, it will impact the locals more than it does to speculators. Seems the Govt and RBNZ are content moving the chess pieces on the board, they don't want to take bold steps to address the root cause of the problem.

I can guarantee you that a majority of the locals who are holding property will be very happy to see their property values are rising. Nothing gives them more pleasure than seeing the price of their house going up as it makes them feel richer. It makes them feel better about their retirement. Stuff the generations who have not hit the market yet because they are too young. They can worry about themselves.

Eventually though baby-boomers will have to realise their investment to pay for health and retirement costs. They will be looking to sell at around the same time. More supply + less demand = downward prices.

That is why GOVT keep being blind on foreign ownership and immigrants number. They are the cure.

thats the problem with property its like a slow moving ship can take awhile to turn around and you dont know until you see the sun coming up over the wrong side

Stratified median house prices in Auckland were up 29% year on year in Auckland. Pretty fecking insane. Median house prices up $30k in the one month from August, and average auckland house prices increasing $47,290 during September to $917,248.

If we repeat last years normal seasonal pattern Auckland's average house price will be $996k by December, and finally break the $1m mark at $1.068m in March 2016.

All off a base that was arguably bubbly to begin with.

This is why the Reserve Bank need to start throwing bigger bricks at the Auckland property market, NZ's financial stability is at risk.

What's insane is year on year 35% in Whangarei, 30% in Mt Maunganui/Papamoa, 27% Taupo and 26% Tauranga! Auckland is lagging behind!

Buying expensive with historically the lowest interest and not much more room left for ocr cuts doesn't seem a smart retirement investment plan to me.
Speculation, buying and selling quickly looking for capital gains? Maybe. But expecting prices to increase further now that the Chinese vanished from the market and the glonal crisis is around the corner is rather naive.

Many dad and mum investors will be trapped under water too.

Duplicate

Ohh, just think how much money you've lost because you didn't buy a house back in 2012. Ouch. Keep waiting for prices to come down. I'm sure the clown car is just around the corner...

Just wait till summer. Lots of humble pie to be eaten by the naysayers.

OU lets give it another month shall we. How many were buying in Auckland in September in order to beat the new IRD / Bank Account rules? We just don't know. Thos buying outside of Auckland are taking more of a risk in my opinion. Less restrictions on building and smaller job markets add risk that does not exist in Auckland. Look at New Plymouth. Hit by dairy and oil downturns therefore stagnant housing market. All markets have their risk fractures.

apart from Tauranga and Hamilton, I suspect the buying is aucklanders cashing up moving away mortgage free with some cash in the pocket.
if we had a buyers register we would know for sure

Excellent. The faster this shitshow inflates the faster it explodes and takes the whole rotten system down.

Why isn't the government applying the 30% LVR requirement across all NZ. All that is happening is that the Auckland problem is leaking out around the country. We don't want the problem to head in the direction of Auckland before they do something.

the government has advocated that responsibility to the RB, they are to ensure a stable financial system in NZ.
also a lot of the banks have ex national MP's on their boards

are we heading for another 2009, this time its not the finance companies at the forefront of lending on property
http://www.scene.co.nz/buyers-beware--appeal-court/308347a1.page