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Winter hits housing market with sales volumes falling but a lack of listings keeps prices high in July

Winter hits housing market with sales volumes falling but a lack of listings keeps prices high in July

House prices may be flattening out around recent record highs, with the national median selling price hitting $505,000 in July, up from $500,000 in June and just $1000 short of the all time high of $506,000 set in May, according to the Real Estate Institute of New Zealand (see interactive chart below).

But July's  median prices set new records in four regions: Auckland $825,000 ($821,000 in June); Waikato/Bay of Plenty $450,000 ($438,000 in June); Northland $376,000 ($360,000 in June) and Manawatu/Whanganui $265,000 (249,000 in June).

However median prices declined in Wellington to $450,000 ($455,000 in June); Nelson/Marlborough $401,500 ($405,000 in June) and Christchurch $437,500 (440,000 in June).

The number of homes being sold has fallen away sharply, with 7299 homes sold by REINZ members in July, compared with 7864 in June and 8121 in July last year.

In Auckland the sales situation was even worse, with just 2520 Auckland homes selling unconditionally in July compared to 2737 in June and 3160 in July last year.

Within the Auckland region prices dropped slightly compared to June on the North Shore ($1,062,500 in July compared to $1,068,500 in June) and in the central suburbs on the Auckland Isthmus ($837,000 in July compared to $850,000 in June) and in Rodney ($852,500 in July compared to $870,000 in June).

But the biggest fall was in Pukekohe/Franklin on Auckland southern flank where the median price dropped from $748,000 in June to $672.000 in July (-10.2%).

Median price rose rose strongly in Waitakere ($803,000 in July compared to $784,250 in June and in Manukau $805,000 in July compared to $753,500 in June).

Price movements were also mixed within the Waikato/Bay of Plenty region, with Hamilton's median up 5.2% in July compared to June while Tauranga's median declined by 2.3% compared to June and Mt Maunganui/Papamoa's median was down 7.2% compared to June.

There has also been a big decline in the number of homes being listed for sale, with the REINZ reporting that its members had a third less homes available for sale than they did in July last year.

"Prices continue to rise in may regions  showing that demand is still firm," REINZ spokesman Bryan Thomson said.

"Sales volumes remain below previous periods, as the continued shortage of supply impacts buyers, who are struggling to find properties to buy.

"We will watch market reaction with interest as the expected increase in listing numbers during the spring and summer selling period become available and the market assesses the impact of the recently announced LVR rule changes, the approval or otherwise of the Auckland Unitary Plan and a possible interest rate cut."

Click on the following link to read the REINZ's full regional reports:

PDF iconREINZ Residential Regional Commentary - July 2016.pdf

Median price - REINZ

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The 'NZ total' chart will be drawn here.
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NZ total
Source: REINZ
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Northland
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Auckland
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Waikato
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Bay of Plenty
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Gisborne
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Hawke's Bay
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Manawatu
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42 Comments

I thought that Ron Hoy Fong guy said that the market would go "bananas" from May onwards.

National Government has made it go Bananas and us the monkey.Legacy of JK

140 sold in mid winter July month in Palmy. Only 125 listed on Trademe. So less than 4 weeks inventory there? That's the real recipe for a market about to bananas price wise. Days to sell also show fastest in country. Watch what happens in spring when the fhb's start getting really active with their newly boosted kiwisaver deposits

Greg.
The median price that is quoted for Christchurch of $437,500 seems too low knowing the Chch market.
Does it include sections that are sold?
I know it does include "as is where is" sales which distort the true market.
Reply would be much appreciated.

REINZ stats include sections as well as dwellings. 

This doesn't mean anything. Calm before the storm

In a reasoned market I would have probably sold and bought a new home by now (conditional of course on sale etc). No way in hell I'm selling into this market on the off chance I can find something I want to replace it. I'm sure there are thousands like me.... thus will we see a stall, with house sales reduced to being largley landlord cast-off's and the odd move to Rymans?

I've had friends wanting to buy elsewhere and to sell their house but there's a struggle to get the equity together for a more expensive house. For many it's no possible to buy a better house because that next house is too expensive.

Yes the Auckland average price quoted @ central suburbs on the Auckland Isthmus ($837,000 in July compared to $850,000 in June). Seems some what low compared to what was quoted in recent previous articles such as this one: http://www.interest.co.nz/property/82891/qv-figures-show-auckland-now-ju...

Quoting articles figures: As of July the average in the country's largest city stood at $992,207, up from $975,087 in June. The Auckland market has increased 16.0% year on year and 5.2% over the past three months. Values there are now 81.6% higher than the previous peak of 2007.

Or are these figures just pointing to Auckland's outer regions including parts of Northland? I would expect to see a drop in areas such as South Auckland; Pukekohe/Franklin. Since these areas have largley been targeted by local Investors (Mom&Pop), Hamilton and Tauranga will probably also drop due to local banking restrictions on Kiwi Investors.

I see there's been little change in Auckland's North shore.

$837,000 - median
$992,207 - average

Additional $7793 needed for a historical milestone to be acheived.

-double post deleted-

Humm... All in the wording of how they want to display the figures. It would be good to stick to an average of the sale prices, that's far better market indicator of what's going on.

$996,550 - stratified median...even closer.

So I take it we're a hare's breath away from the million mark, not sure whether to laugh of cry? I guess if I were an Estate Agent I would be laughing.

Don't want to be the phrase police, but it a "hair's breadth" not a hare's breath, if you think about it, it makes much more sense.

Bless you Pocket but it's an old English expression. Picture a Hare or large rabbit in a field and its breath in cold air which is visible and has a short distance.

That's a hare's breath.

LOL, Now you're just splitting hairs. Trust me old English expressions are the last thing you worry about. Many things have been lost on the younger generations, including the right to own their own land and homes.

Look for these tells to identify the brainwashed:

1. LOL

2. Wow.

3. So…

4. In other words…

5. OMG

6. HAHAHAHA!

7. (Any personal or professional insult)

8. Hitler analogy

To be clear, these are only tells if they don’t accompany some sort of rational counter-arguments or facts. If you see LOL followed by a link to a good counter-argument, or to credible studies, that’s not brainwashing. It is only when you see the tells presented as a substitute for reason that they signal brainwashing.

http://blog.dilbert.com/post/148692199141/how-to-identify-the-brainwashed

You forgot Troll

40% increase in Levin that's sneaked by a few. Transmission gully will essentially move levin and Palmy 30 mins closer to Wellington - government deps already keen to let ppl work from home to save office space... interesting times in the lower north island.

Or we can wait for this . Do you think immigrants to NZ have the same attitude to our laws as the situation in perfect Sweden ?
https://www.youtube.com/watch?v=vZ-nw0ijTpQ

I live in Mt Albert and watch the market pretty closely via Auction results.

All I can say is that the market pricing does not appear to be slowing or dipping. At a local Real Estate Auction last week, out of 5 houses up for auction, 4 sold. Those 4 all sold for 50%+ above CV - nothing special about the houses but crazy prices

Hopefully the price inflation is abating but in East Auckland the main problem remains that there are very few properties coming on the market.

There isn't much on here but what there doesn't seem to be shifting. Owners asking for unrealistic prices. I've noticed a couple have come down in price.

Bubble, no bubble, stock, no stock. It’s the middle of winter, listing are always a bit shy = equals reduced listings. The ponzi investors will not sell unless they have to as that is how their model works = reduced listings. The flippers now have a two year compulsory tax penalty before they can go tax free again = equals reduced listing or flipper lag. One might speculate that a large chunk of the markets turnover this year was just flipping between members of the ponzi party and that genuine listings were always really low. Yawn – the only winner here is interest.co.nz’s click rate.

Like Winter in GOT, Election is coming. Will Winston halt non-permanent resident purchasing , or tax the hell out of them like Canada and Aussie have done? I think yes, and that policy has a good chance of seeing him back to the baubles of power one last time. Lucky us…but I would choose Winny over the ongoing debt Ponzi destruction of the NZ way of life any day. Will others…?

Imagine the imminent locking out of overseas Chinese ponzi party members, witness the impact that has already had in Canada. What will that do to prices? Would that leave the current flipper party holding the baby when the music stops, and one year left to run on tax free flip? Will their bank still love them, or will the Bank look after its own interest? Will the banks still love the low equity ponzi party members if they loose their jobs?

Pays down debt, tightens seat belt, and grabs popcorn...

Yes it is a roller-coaster but it's probably best to bit the bullet now.

Even with out current Government. I'm betting that before the two years are up regarding CGT and the "Bright line test" that our Government will increase or do away with the two year limit so that CGT is compulsory for all property Investors.

And any Political Party that's worth its salt would looking to restrict foreign Investment in to residential housing, there's plenty of other commercial property areas they can invest in without locking out generations of Kiwis from home ownership.

I'm not saying you are wrong but why is Auckland slower than the rest of the country and why is it slower than this time last year?

We did have a record breaking year last year

dp

National Business review on Median prices

Once again, the figures demonstrate how distorted the median house price data the Real Estate Institute chooses to put in its press releases is.

Against the 16.3% national increase in the stratified index, which removes distortions caused by a different composition of sales from month to month and which is the figure the Reserve Bank uses, the national median house price rose 8.6%.

Instead of the 23% increase in the index in Wellington, the Wellington median price rose a more sedate – although only by comparison – 14%.

Helping to explain this wide variance, the number of homes sold for more than $1 million in the month were 12% higher than the number in July last year.

And sales of homes for less than $400,000 fell 4% in July compared with the same month last year.

BD you need to pay for this index data from reinz? What % is Palmy up over the year on the reinz index? Cheers

It's been said before

"If you torture the data long enough, it will confess" Ronald Coase

If RE's start saying that the market has reached a plateau, what do you think that means? It means house prices are not going up at the moment. This has been stated by both Barfoot and Thompson and REINZ recently. If you want to lock in your capital gains, sell now, and move out of Auckland. RE's don't care about prices, they are more interested in volume, they are commission agents. If you look at the Auckland REINZ figures the only thing getting it to + 0.5% is Manukau at +6.8%. Anyone who knows anything about Manukau, knows that it is a tale of two cities and that the median for this area can easily be distorted. RE's in most cases control the market, they dictate the prices, if they are saying prices have plateaued it is because they want sellers to lower their price expectations because the market has indeed plateaued. The Auckland Ponzi scheme has halted.

"Figures from Immigration New Zealand showed 209,441 work visas were approved in the last financial year, an all-time high and up nearly 25,000 on the 2014/15 year."

200,000 temp visa workers that can buy NZ property and pay ZERO stamp duty. No wonder house prices are through the roof.

13billion a year.. approximately 1billion a month spent on housing by temp visa workers and foreign students.

Email your MP'S asking them to follow Vancouver's lead and apply 15% stamp duty to these foreign buyers.

Encourage the reporters/editor of this website to do an article explaining how nz has a different definition of foreign buyers than Australia, Canada and Singapore. In NZ foreign buyers per media/govt are only people living offshore(non residents). Temp visa and foreign students are not considered foreign. Ridiculous.
Maybe banks/re firms have dictated this definition.

House prices are still cheap for foreigners....

Australia and Canada have now started charging stamp duty on foreign buyers. Good chance some of those buyers will now look at Auckland /NZ with ZERO purchase tax. The lowest in the world. Plenty of foreign demand left for NZ houses.

Imagine if that 13billion spent by temp visa and students was spent on building new homes and not buying existing houses. Stamp duty exemption for new builds would encourage supply. Wake up NZ

Yet several hours later, interest.co.nz post this story...
"Modest two-bedroom Sandringham house sold by owner of 35 years for $1.39m"

Hahahhahaha. The market changed in 2 hours.

Quite confusing headlines because as far as I can tell two bedroom units in the Eastern Bays seem to have gone up by about 200K since the start of the year. This for instance https://www.barfoot.co.nz/576011 just sold for 967K and this https://www.barfoot.co.nz/575968 just sold for 970K. It all kind of indicates a marked which has gone hyperbolic.

love this article
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1169...
especially this quote :

"Consequently, changes in immigration policy, which can impact only on visa-controlled immigration, are unlikely to have much impact on the housing market."The authors said growth in net migration was largely driven by student and temporary working visas, who were less likely to buy houses.

Less likely to buy ..however per the LINZ report
student and temporary working visas group bought 13,500 houses in the last year. 250 houses a week
At Auckland's Average price this is approximately 13Billion NZD or 1BN a month.

Talk about the media trying to influence the public.... and send an incorrect message out there.

National PR spin at its finest. On what basis did the authors of that report make that comment "who were less likely to buy houses"

Did they have the figures that no one else did ?

Did they bother to Look at the LINZ report. Page 12 I believe that states 13,500 were sold to this group. 32% of resident buyers to be exact. Likely higher if include trusts and companies with foreign beneficiaries.

Why would Auckland be any different to Vancouver or Sydney in terms of foreign buyers?.