The median price of homes sold throughout the country declined by 1.1% in June compared to May, according to the Real Estate Institute of NZ.
The national median selling price was $529,000 in June, down from $535,000 in May.
In Auckland the median price dropped from $857,000 in May to $850,500 in June, well down from the peak of $905,000 set in March.
However, prices in Auckland may be sliding more than those figures suggest, with the REINZ's House Price Index showing Auckland prices have now fallen below where they were 12 months ago.
Of the 16 districts around the country the REINZ publishes median prices for, they dropped in eight compared to May (Northland, Auckland, Waikato, Gisborne, Hawkes Bay, Taranaki, Marlborough and Southland), rose in seven (Bay of Plenty, Manawatu-Whanganui, Wellington, Tasman, West Coast, Canterbury and Otago) and were unchanged in Nelson.
The median price was also down in Queenstown-Lakes, traditionally one of the hottest real estate markets in the country, where June's median price dropped to $860,000 from $881,500 in May, putting it below the June 2016 median of $875,000.
In the Wellington Region the median price rose from $525,000 in May to $530,000 in June, but in Wellington City it dropped from $665,000 in May to $650,000 in June.
In Canterbury the median price rose by $500, from $435,000 in May to $435,500 in June, while in Christchurch it rose from $446,000 in May to $450,000 in June. (The interactive graph below shows the price trends in all regions)
Homes are also taking longer to sell, with the median number of days required to sell a home up by five days in June across the whole country compared to a year ago, and up seven days in Auckland.
And sales volumes are declining.
In Auckland the number of homes sold in June was down by a third compared to June last year and nationally sales are down by a quarter.
In Auckland 1769 homes were sold in June compared to 2212 in May and 2649 in June last year.
That was the lowest number of homes sold in Auckland in the month of June since 2010.
"The number of properties sold across the country is the lowest we've seen in the month of June for three years, particularly in the $500,000 and under property price bracket," REINZ Chief Executive Bindi Norwell said.
Westpac's Acting Chief Economist Michael Gordon says the market slowdown that started in Auckland is spreading beyond the region.
"The latest REINZ house sales report points to a substantially softer housing market in June," Gordon said in a Westpac First Impressions newsletter on the figures.
"While the slowdown was originally concentrated in Auckland, it is now spreading to a greater number of regions.
"Sales fell sharply in seasonally adjusted terms, that is much more than just the usual winter lull.
"The REINZ House Price Index fell by 1% in Auckland and is now slightly lower than it was a year ago.
"Notably, house prices in the rest of the country, which had been rising at a solid pace up to now, were flat in June.
"They're still up 9% on a year ago, but the slowdown in sales across the country suggests that some further cooling in the pace of house price growth is on the way.
"We have long been warning of a cooling in the housing market this year.
"Up until now the puzzle has been that the market outside of Auckland has remained so strong, given that what we see as the main restraining factors - loan-to-value restrictions and rising interest rates - apply more or less equally nationwide," he said.
Here is the REINZ's full report for June:
Median price - REINZ
Select chart tabs
335 Comments
Home owners are being told not to panic. They are using reverse psychology again.
https://www.stuff.co.nz/business/property/94684331/homeowners-told-dont…
Dont panic Mr Mannering. Dads Army. If it wasn't sad it would be funny.
https://www.stuff.co.nz/business/property/94684331/homeowners-told-dont…
Love it, I have to try and up vote you all. My concern is with our youth, I can only hope I have instilled the value of critical thinking with my offspring, I have sadly given up hope with the rest, this is awful as there will be an ever increasing disparity between the have and have nots. Luckily my offspring will be in the former group.
So my tuppence which I'm sure everyone is eager to hear - I love Auckland I think it's a wonderful place, however, it isn't by any stretch of the imagination Vancouver, Toronto, Sydney let alone a London, Hong Kong or NYC. All of these cities that keep coming up in comparison to house price rises here are vastly different. London has thousands of years of history and is one of the major gateways to Europe (the biggest trading block on earth), Vancouver, Toronto both huge cities, Hong Kong is the most democratic part of China (Although all have been tangled up in this web of property inflation). There simply is no reason for Auckland prices to have shot so far out of whack - it's pure speculative greed.
Re: what happened in the last GFC - NZ was hardly touched by it, protected by AU and China so your 10% drops that happened were absolutely nothing in the grand scheme of things. This time around there is no protection, Australia is under the same pressures - it was kept afloat by mining and exports to - you guessed it - China. China has it's own problems with finances at the moment and won't be there to save anyone. If you own a house, sit tight and ride it out, if you've been speculating more fool you and you deserve all that's coming your way.
Once all this has settled down, any Government worth their salt has to do a post-mortem - what happened, how did we get here and how do we prevent this from happening again - that would involve a crack down on speculative investment. So find something else to do with your money, do something productive and stop playing Monopoly.
"Once all this has settled down.."
The assumption you make is that it can resettle. There is little in the way of ammo left to kickstart a debt ponzi ... aka capitalism .. this time round. You need energy to back the new debt.
We are the death throws of the industrial/Oil age - there is no magic law to pass to reproduce cheap easy resources which have been burnt already. People forget that Oil cos can go broke just as coal mines go bust - you dont run out of coal down the mine - it just becomes uneconomic to keep "mining".
I wholeheartedly agree, by settle down I mean this house crisis, which will settle down after a time. QE is done and has succeeded only in delaying a deeper recession at the time, there is nowhere left for it to go and for all intents and purposes it has failed miserably - it has created a deeper long-term malaise, when potentially we needed a full recession to give the world a wake up call that it so badly needs. Within the introspection that has to occur not only locally but globally there will have to be a change from neo-liberalism.
Yes I also agree with you. The Auckland market has been driven up by mostly speculative greed. They thought that the property investment party could never end and then China suddenly turned off the credit tap.
Yes the dust is indeed settling. Sales are down by a third and prices are starting to slip. Properties prices are returning to more affordable levels that will become more clear in the next six months when we stop comparing YOY data when prices were at their peak to the current subdude prices, this makes the market look relatively flat or not much decline. This is why it usually takes around two year for a market to bottom out.
What fascinates me. Is how the more inflated central Auckland areas that were very much pushed by foreign buyers they have now gone, expect to maintain their multi million dollar prices? It's very clear from the current auction results that those properties are finding it very difficult to sell. And yes the same is happening in cities that were also pushed up by the same foreign buyers.
ham n eggs,
Why,given your belief that the oil age is about to end-and badly-is the oil price where it is? Why is it not back over the $100pb level and climbing?
Forget new energy technology for the moment and just look at extraction methods. The Wardlow field in Texas sits at the Southern end of the huge Permian Basin. It has an estimated reserve of 168m barrels,of which only a little over 100,000 have been extracted. A company called Galex Energy are working on ways of getting at this oil,one example being acoustic waves that are "swept". The technique alo involves pressure changes.Would yo bet against them being at least partially successful. Another example is North Sea. Better extraction methods have greatly increased its life span. At BPs Clair field off Shetland, a new technique known as Losar is being developed. It involves lowering the salt content to reduce the binding power of the ions. This may or may not be successful,but if not,the research will continue.
Of course the oil age will end some day,but not yet. You have beaten this particular drum for as long as I can recall,ut as I have previously remarked,without ever producing evidence to back it up.
Surely at the end of the oil age the price will be low because alternatives will dominate.
Having said that, I don't think we are at the end of the oil age. We are at the end of the coal age. Coal has been killed by natural gas.
Oil will end around 2050 I think. It depends when you measure the end. It might be where coal is today in the 2030s and then the slow strangulation will last another 20 years just like it will for coal.
Linklater - re your question. The amount of Oil available is directly related to what the economy can afford to pay for it - so the evidence is in the price! Technological advances are fine but they are ineffective if they arent cheap enough. The price is low because demand is too weak to reflect a true cost of production.
Conventional economics say that the price will SIMPLY rise to reflect any scarcity - but the opposite is happening. The economy cant now function on prices up near the $100 .. so any rise is immediately met with lower demand.
And i agree with Hardly above - we are past peak coal as well. The economy doesnt care what energy we are burning, as long as we increase the burn ... so a drop off in ANY energy source is a bad indication of where things are headed.
A different way to phrase the problem is ... consumers not being able to afford the goods made with high-priced energy products, because the wages of the 90% (the non-elite workers) are too low.
How do you always fail to see the real reason that the oil price is artificially low?
"The price is low because demand is too weak to reflect a true cost of production."
Wrong.
The price is artificially low because of OPEC, not any demand constraints.
Is it any wonder that the price conveniently sits just under an estimated marginal cost of production for shale producers?
Plus, it's just categorically wrong to say that world demand is decreasing at present.
Unless of course you concede alternate energies are substituting. Which you don't.
Nymad - then you need to explain why growth isnt absolutely ripping away ... given there arent any demand constraints and the price is being held artificially low (in your exact words)???
When I say demand is decreasing im referring to affordability constraints for Oil at a certain price .... there is unlimited demand for porsches ... just not at the price they sell for.
Alternate energies arent substituting ... DEBT has been substituting .... but if if something cant go on forever it wont.
This is what low prices is causing ... no investment.
But they then predict prices to spike up.... How do you think the economy will take that?
https://www.bloomberg.com/news/articles/2017-07-12/halliburton-sees-202…
Saudi Aramco Chief Predicts Oil Shortage as Investment Falters ...
If your intersted in the oil markets good two part podcats interview here with Arthur E. Berman.
"A a petroleum geologist with 36 years of oil and gas industry experience. He is an expert on U.S. shale plays and is currently consulting for several E&P companies and capital groups in the energy sector"
https://www.macrovoices.com/272-art-berman-crude-oil-special-part-1
The comment of housing 3 to 4 times wages isn't $240 to $320k , and where did 10 times is $800000 come from, twisting numbers isn't helpful, I'll say now I don't know the real figures but if it's a combined wage and I've heard $110 is the average x 3 to 4 wages would be $330 to $440k , plus your deposit of just under $100k isn't that stupid, a loan of $440,000 plus rates, water, insurance, would easily wipe out one wage ,there's a real chance a lot of locals won't be joining the market unless there's a big drop, Auckland became unaffordable to a large amount of locals a long time ago and the heavily leveraged up won't be supporting sales any time soon, letting the market climb 30% ? above the people that actually work and live there simply doesn't make sense and would never had lasted,
Wow its pretty ugly on here, all it proves is the gulf between the have and the have nots is getting ever wider by the year. Yes its tough, everyone I know that's now 40+ tells me if they had not bought a house 5 years ago they would be totally screwed now and its true, you simply cannot argue with that. Anyone that was in a financial position to buy a house 5 years ago and didn't is now kicking themselves so there is plenty of very pissed off and resentful people about on this site. So many people on here hoping the arse is going to fall out of the market but I think there is a better chance of winning Lotto than that.
Asset price inflation has an unusual effect on people. When prices go up, such as we see in bubbles, people are all of a sudden knowledgeable about future events, particularly as they're related to things that they have been enriched by. When prices go down (or dare I say crash), they tend to be much more humble and circumspect.
I'm a Bear in this housing market as opposed to a Bull and I can assure you that I have no envy. I am freehold and have zero debt, so you can't make assumptions that people are envious of others when they are calling a downturn. I don't wear rose tinted glasses. I have been around long enough to have seen quite a few property cycles and know how the banks work from the inside and when banks pull back on their lending and change their lending policies in unison, something big is going on.
I suspect the banks have finally come to the realisation that they have stuck their necks out too far with many borrowers and have began to tighten up. I must admit the borrowing was pretty easy some 10 years ago but noticed it had tightened further even as far back as 5 years ago. Yes there is a possible train wreck ahead for some people that are living on the financial edge but for many people its not a worry as long as you keep your job.
China established SAFE in January 2017 to stop their investors laundering their millions. House sales and prices going down is not a coincidence.
https://en.wikipedia.org/wiki/State_Administration_of_Foreign_Exchange
Still moving along in Rems but taking a bit longer to settle, from agent today:" 30 Orakei Road, one of the highest prices achieved in Remuera, price undisclosed" . Its a trophy estate but point is that things are still selling, just more normality back in market now. Which is good.
I cannot recall seeing so many comments on a property article. It proves the fear out there and the relief from those who are currently not in a position to buy. One thing is certain as we get closer to the election Auckland prices will drop more and more as fear creeps into the minds of those who are losing equity. If National loses the election the drop will gather even more pace. Scary times for those who bought before August or so last year, especially those with large amounts of debt. There will be negative equity cases if they are not already happening.
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