The REINZ House Price Index shows mixed results round the country, but the monthly figures should be treated with caution

House price growth slowed in Auckland and Wellington in September but rose in Christchurch, according to the Real Estate Institute of NZ's House Price Index.

It shows that across the entire country, house prices increased by 2% in September, which was exactly the same rate of growth as August.

But there were some significant regional variations.

In Auckland monthly price growth dropped from 2.3% in August to 0.9% in September, with all Auckland districts reporting ongoing price growth apart from the central suburbs where the Index recorded a 1.9% decline for the month.

And price growth in the Wellington region dropped from 1.7% in August to 0.5% in September, with the Index recording price declines of -1.3% in Porirua and -1.0% in Upper Hutt, while Lower Hutt and Wellington City recorded monthly increases of 2.2% and 0.3% respectively.  

In Christchurch monthly price growth rose from 2.6% in August to 4.9% in September.

And removing the Auckland figures from the picture shows that price growth in the rest of the country as a whole, increased from 1.7% in August to 2.9% in September.

The full regional figures for September are detailed in the table below.

However the monthly figures from the REINZ should be treated with a bit of caution.

That's because the figures it publishes on market activity each month are likely to be revised, either up or down, in the following months.

For example, when the REINZ published the HPI for August, it gave the Auckland region an index figure of 3985 and the September report shows that this has increased to 4009.

That should mean that the Index for Auckland increased by 0.6% for the month, but the September report lists the monthly increase as 0.9%.

Checking the REINZ's published HPI figures for August and September shows similar variations in most regions and some of the variations are significant.

For example, the REINZ's published figures show the HPI for Porirua declined from 4415 in August to 4284 in September, which suggests a change of -3.0%, but the REINZ's September report gives the change for the month as -1.3%.

So why is that?

It appears that the problem lies with some agents being a bit tardy in getting details of their sales to the REINZ each month.

According to the REINZ, its monthly statistics are based on unconditional sales reported by its members each month.

For reporting purposes, it has a cut off date for results each month, allowing it to make its calculations on market activity, which it then publishes in its various reports.

However some agents take longer than others to report their results, so the REINZ is still receiving results after the cut off date.

These late entries result in revisions being made to the figures for previous months, after the monthly reports have been published.

So the monthly figures REINZ publishes are accurate based on sales information received "as at" the cut off date and are likely to be subsequently revised.

Of course these late entries don't just affect the REINZ's House Price Index, they also affect the REINZ's reported monthly median selling price and sales volume reports.

The REINZ says it has been adjusting its monthly figures in this way since March 2017.

So does this mean the REINZ figures are inaccurate?

Inaccurate is too strong a word.

The revisions that REINZ  has to make to its figures will diminish over time.

So the three month change figures will be significantly more accurate than the monthly change figures, and the annual figures will be even more accurate.

But the monthly figures should probably be best regarded as a general indicator of market movements which could be subject to change, rather than an exact figure.

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REINZ House Price Index - September 2021

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