By Bernard Hickey
The Real Estate Institute of New Zealand (REINZ) has reported the median house price and the less volatile stratified house price index both rose to record highs in June, while sales volumes for the month rose 17.3% from a year ago.
Meanwhile, state-owned valuer QV said later on Tuesday that nationwide residential property values had risen again in June according to its latest index. Values were up 1.8% over the past three months, 4.2% up over the past year, and were now only 1.3% below the previous market peak of late 2007.
“Buyers and sellers lost confidence during the global financial crisis and in that context the current the market should be seen as recovering rather than ‘booming’,” REINZ Chief Executive Helen O’Sullivan said.
QV's Jonno Ingerson said: “Despite the number of sales being up on recent years, and values increasing, we are not experiencing a boom.
"Nationwide, the current number of sales is still around one third below peak levels, and over the past year values have increased only one third as quickly as they did in the boom years 2003 to 2007. Even in Auckland the rapid increase in values over the past few months is less than the rate seen in the boom years," Ingerson said.
Prices hit records
The median price in June was NZ$372,000, up NZ$2,000 from the previous record of NZ$370,000 set in March this year and up from NZ$369,000 in May. The national median was up 3.2% from June 2011 and the stratified median house price index, which adjusts for the mix in the types of houses sold, was up 5.3% from a year ago at a record high.
There were 6,135 houses sold in June, which was down 14.5% from May, but this was in line with seasonal patterns which see sales slide off during winter. This was the strongest June sales month since 2007. There was NZ$2.8 billion worth of property sold in the month.
The REINZ Housing Price Index also recorded new record highs in Auckland and Christchurch. Other South Island and Sections were the only two to record falls in June. Compared to June 2011, the REINZ Housing Price Index rose 5.3%, Auckland rose 7.0% and Christchurch 8.8%.
“Keen buyer interest in Auckland and Christchurch – which together make up about half of national activity – drove the New Zealand real estate market to new highs in June and a new record median price,” said O’Sullivan.
"The overall pattern for the rest of New Zealand shows improvement in sales volumes, with prices on the whole steady rather than up," she said.
"The constraint across the country appears to be shortage of properties available to meet buyer demand. This is most acute in Auckland, where new home building is still sluggish, and in Christchurch where the earthquake recovery is slowly getting under way.”
The average number of days to sell per listing fell to 37 in June from 38 in May and was down from 44 a year ago. It was also below the long term average of 41 days.
See the full REINZ statistics for June here.
See the full REINZ commentary on regional sales figures for June here.
Values up in June, but no boom
Nationwide residential property values had risen again in June according to its latest index. Values were up 1.8% over the past three months, 4.2% up over the past year, and were now only 1.3% below the previous market peak of late 2007, QV said on Tuesday.
"All the main centres have increased in value over the past year, and all apart from Wellington have increased over the past three months. The fastest increasing areas are Auckland and Christchurch. There is more variability in the provincial centres and smaller towns across the country, as values in those areas respond to local economic influences," QV.co.nz Research Director Jonno Ingerson said.
Sales activity had been significantly higher in the last few months than it had been for several years, with Auckland again stronger than most other areas.
"In contrast, the number of new listings coming onto the market has slowed considerably in recent months meaning reduced choice for potential purchasers. As a result sales activity is likely to slow in the coming months until the number of properties for sale once again increases, which typically will occur in spring," Ingerson said.
“Despite the number of sales being up on recent years, and values increasing, we are not experiencing a boom," he said.
"Nationwide, the current number of sales is still around one third below peak levels, and over the past year values have increased only one third as quickly as they did in the boom years 2003 to 2007. Even in Auckland the rapid increase in values over the past few months is less than the rate seen in the boom years.
"Overall, New Zealanders remain cautious around house buying and selling decisions," Ingerson said.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.