House prices, volumes up in October

Property

Spring property surge drives sales up and pushes median house price to a new high in Auckland

13th Nov 14, 2:51pm by Greg Ninness

<a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

The spring property surge found its legs in October with the REINZ recording an 11.8% lift in the number of homes sold compared to September.

However the 6,608 homes sold in October was still 2.4% down on the number sold in October last year.

The national median sales price was $430,000 in October, up $10,000 compared with September but $10,000 below the all time high set in March.

But the median price in Auckland hit a new all time high of $640,500 which was $3,500 more than the previous all time high set in March.

The number of sales made in Auckland increased to 2,457 in October, which was up on the 2,292 sold in September but well down on the 2,681 sold in October last year, suggesting demand continues to outstrip supply in the region.

In the Wellington region the median price increased to $407,500 compared to $400,000 in September and $405,000 in October last year. The volume of sales also rose strongly to 693, compared with 587 in September and 663 in October last year.

In Christchurch the median price increased to $430,000 compared with $425,400 in September and $395,500 in October last year.

The number of homes sold in Christchurch rose to 573 in October compared to 506 in September and 566 in October last year.

"Activity has increased in most across the country, with the largest monthly sales increases in the South Island, REINZ chief executive Helen O'Sullivan said.

"We have also seen an increase in listings across most of the country, although in many places the number of listings remains below that of previous years.

To read the REINZ's full report for all parts of the country, including those for main urban areas and subregional figures, click on this link.

See the charts below for historical movements in the median sales prices of all regions..

Median price - REINZ

Select chart tabs

Source: REINZ

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12 Comments

by doublegz | 13th Nov 14, 3:50pm 1415847020

Before you comment, remember Wheeler says Auckland now "NOT A BUBBLE"!!! Now go ahead with your comment thank you.

by Alter Ego | 13th Nov 14, 3:56pm 1415847380

http://en.wikipedia.org/wiki/Economy_of_New_Zealand

Why inequality has surged. Put it all together. Do the sums. Nuff said.

No need for wikileaks.... all down in black and white...poor citizens...overseas interests pushing up prices. Plus those insider trading...often called the Leadership. If you control the rates of exchange and all other rates, you can work wonders. (I wonder why??)

by waymad | 13th Nov 14, 4:40pm 1415850049

"Why inequality has surged. Put it all together. Do the sums. Nuff said.

overseas interests pushing up prices.
insider trading...often called the Leadership.
control the rates of exchange and all other rates"

Yeah, nah. Conspiracy theory at its most shonky.

Try some real economic factors: Times link is long since rotted and gone behind the inevitable paywall, but the original list of factors is:

1. license housebuilding, so that no one could build a new house without a licence, or even rebuild an old house or a redundant barn.

2. encourage developers to maintain large land banks in order to benefit from rising prices.

3. leak out new permissions only after long periods of delay.

4. combine this with an unlimited flow of mortgage credit and relatively low rates of interest.

#1 is Gubmint - LBP.

#2 and #3 are the Economically Clueless Councils - zonerating, spraying MUL's and RUB's around the show, oblivious to the economic effects thereof.

#4 is the Banks and their regulators, because despite the cries of woe in the MSM, credit is by any historical comparison, cheap.

There ya has it: from the late Sir William Rees-Mogg (former editor of the Times (London)) - the recipe for a Cartel.

To which we can in our little set of islands, add the following:

woefully low productivity in the building industry (see the Productivity Commish on this)
a materials duopoly which keeps -er - materials prices at around 20-50% above offshore rates once fx is figured in
tax policies which favour property over many other investment forms.

Cock-up, and Cluelessness, not Conspiracy.

by Andy Rodgers | 13th Nov 14, 5:24pm 1415852688

waymad - great post, you've nailed it and nothing is going to change anytime soon sans another GFC.

by Kumbel | 13th Nov 14, 6:49pm 1415857760

Well said.

The only thing either hard or mysterious about any of it is why our governments are so reluctant to act.

by steven | 13th Nov 14, 7:31pm 1415860291

No, you do your sums, as actually you do not appear to have. From what I can see you are not right I am pretty sure. Most of that rise in inequality happened in the late 1980s and early 1990s, since then the change of inequality in has been small (between say 1995 and 2011).

Also when you cash in hand of a household and then take out housing and rent and compare the before and after figure you should expect a marked increasing difference, if housing was a significant increasing stress that isnt the case from the graphs I have seen they look roughly parallel.

So the Q is what is actually going on? On the one side I see lots of ppl guessing but on the other ppl being honest and saying you cant draw any conclusions from that data, its full of holes such as the increasing use of trusts.

regards

by BigDaddy | 13th Nov 14, 7:26pm 1415859982

Interfering in the market will guarantee disaster.

The RB has meddled and we see the results- higher prices, higher rents and no solution in sight.

Muldoon tried the same tactic in the '80's and the boom he tried to stop went crazy before busting spectacularly.

Why do we loudly cheer when the share market or dairy or profits rise, but when house prices rise it's a bad thing?

No body gets hurt in a free market -until the meddling starts.

by steven | 13th Nov 14, 7:34pm 1415860464

Rubbish, the free market hurts ppl.

Rents dont look to be rising much, certainly not in step with the significant rises in capital value for some suburbs and cities, in fact looks pretty lacklustre NZ wide.

Higher prices? the LVR has chopped out the FHB and we now see rises are subdued to say the least.

regards

by notaneconomist | 14th Nov 14, 8:36am 1415907401

Steven.......how the heck do people get hurt in a free market? We all know you like everything controlled and pretend that you have people's best interests at heart and that is why you want to place controls everywhere....but the fact is the your controlled market is what is hurting people.

We have laws and policies that create barriers and those barriers are severely affecting the price of land and housing.......add in LVR's and you have more barriers.......the land release is highly controlled and regulated.....the people who build are highly controlled and regulated.........the banks are highly controlled and regulated......the interest rates are highly controlled and regulated........all these controls and regulation are not a free market and house prices reflect that !!!!!

http://en.wikipedia.org/wiki/Free_market

A free market is a market system in which the prices for goods and services are set freely by consent between sellers and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority. A free market contrasts with a controlled market or regulated market, in which government intervenes in supply and demand through non-market methods such as laws creating barriers to market entry or directly setting prices. A free market economy is a market-based economy where prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy, and it typically entails support for highly competitive markets and private ownership of productive enterprises. Although free markets are commonly associated with capitalism in contemporary usage and popular culture, free markets have been advocated by market anarchists, market socialists, and some proponents of cooperatives and advocates of profit sharing.^[1]

by Ms de Meanour | 14th Nov 14, 11:23am 1415917437

People who are hurt in a free market are those who are too weak, foolish or lazy to look after their own interests. They might, for example, be persuaded to buy things that they don't really need.

Such people are unlikely to prosper under any system. Arguably the further a Government goes in trying to ensure immunity from harm in weak, foolish and lazy people, the more it imposes costs on people who are not weak, foolish or lazy - forcing them to pay for things they don't need - and encourages weakness, foolishness and laziness in people who would otherwise make the effort to look after themselves.

by frazz | 14th Nov 14, 11:34am 1415918086

Yes just like Mother Nature we must let the strong and bright succed, and kill off the lazy and weak as MM supports. We must follow Frances lead and set loose Tigers to attack the homeless (lazy of course)... Utopia is near ..may the strong thrive.

http://www.stuff.co.nz/world/europe/63191322/mysterious-tiger-on-the-lo…

by bigblue | 13th Nov 14, 10:34pm 1415871279

12 months down the track and most likely that all the bank economists and Wheeler will have got it all wrong. House prices will continue to rise and Akl and ChCh they will increase by at least 10%. The government will fail in its campaign to have more new homes built, interest rates will go down and migrants will continue to pile into NZ. Then you will also see the rents increase as the population pressure hits.