The national median house price edged up by 1.9% to $550,000 in December, but house sales volumes continue to lag, according to the latest Real Estate Institute of New Zealand figures.
In the full year the median house price gained 5.8%, with Auckland house prices moving up just 1.8% to $870,000 - though the median house price for Auckland dropped $10,000 in December compared with November.
But sales figures continued to be soft, with the 5,903 houses sold nationally in December down some 10.1% on the same time a year ago.
The 1,693 houses sold in Auckland in December was the lowest figure for a December since 2010.
'Signs of life'
However, ASB economist Kim Mundy said the housing market had "showed some signs of life in the end of 2017".
"Sales activity lifted over the final months of the year, median days to sell stopped slowly grinding higher and prices firmed again in many regions."
Mundy said the housing market had been "rocked" by a number of changes over the past 18 months and there were more changes on the horizon.
"As a result, we still think it’s too early to say with any certainty that the housing market has turned a corner. Legislative changes in 2018 are likely to adversely impact investor demand which could slow overall activity again in 2018."
Kiwibank senior economist Jeremy Couchman and assistant economist Mike Shirley said they see housing market activity gradually picking up over the coming months, but to remain modest compared to the buoyant market of a few years ago.
"The RBNZ recent loosening of loan-to-value ratio (LVR) restrictions should help support activity at the start of 2018, and supply and demand imbalances in the housing market remain.
"However, there are a number of factors in play that are likely to limit the upside pace of a recovery in the market.
"Net migration has started to ease (although remains elevated), housing affordability constrains haven't gone away, available property listings are growing, and government policy changes may limit the role the investor segment plays."
This is the full media release from REINZ:
REINZ said Median house prices across New Zealand rose by 5.8% year-on-year to $550,000 – up from $520,000 in December 2016 and median prices for New Zealand excluding Auckland increased by 6.6% to $450,000 (up from $422,000 in December 16) according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand.
Auckland’s median house price increased 1.8% in December to $870,000 up from $855,000 compared to December 2016.
This price growth is consistent with what we have observed with the REINZ HPI.
13 out of 16 regions saw prices increase in December, with three of those regions experiencing record prices:
Waikato – up 11.7% year-on-year to $525,000 (a $35,000 increase since November 17 and a $55,000 increase since December 16)
Bay of Plenty – up 20.4% year-on-year to $598,000 (a $23,000 increase since November 17 and a $101,500 increase since December 16)
Wellington – up 4.7% to $560,000 (a $10,000 increase since November 17 and a $25,000 increase since December 16).
Three regions saw a price decrease year-on-year – Marlborough (down 2.1% to $372,000), West Coast (down 1.6% to $185,000) and Canterbury (down 0.7% to $439,000).
Bindi Norwell, Chief Executive at REINZ says: “Median house prices across New Zealand have increased 5.8% in December, representing an increase of $30,000 since the same time last year. This increase defies the predictions of many commentators who 12 or 13 months ago were adamant that house prices would fall in 2017.
“While the increase will be welcome news to those looking to sell their property, for those first home buyers this will not have been the Christmas present they were hoping for. Although there is some hope as the rate of price increases has decreased significantly compared to previous years meaning that if the trend continues, there is more of a chance that those saving for a house deposit can keep up with increasing property prices,” continues Norwell.
The number of properties sold in December across New Zealand decreased by 10.1% to 5,903 – down from 6,567 in December 2016 and the number of properties sold in New Zealand excluding Auckland decreased by 11.6% to 4,184 (down from 4,733 in December 2016).
Auckland volumes decreased by 6.4% to 1,693 (down from 1,808 in December 2016).
Nelson was the only region to experience an increase year-on-year with 76 sales compared with 71 sales in December 2016.
Regions with the biggest decrease were:
Gisborne – a decrease of 30.6% (43 properties vs 62 in December 2016)
Northland – a decrease of 23.4% (177 properties vs 231 in December 2016)
Southland – a decrease of 21.4% (136 properties vs 173 in December 2016)
West Coast – a decrease of 20.6% (27 properties vs 34 in December 2016).
“December represented a continuation of the theme we have seen throughout 2017, whereby the number of properties sold across New Zealand decreased every month when compared with the same month in 2016. It’s a tough comparison, because 2015 and 2016 were very strong years for the industry, and set quite a high bar, so any comparison was always going to be more moderate beside these outlier years,” says Norwell.
“On a positive note, there were a number of areas that saw an increase in the number of properties sold. For example, the Rangitikei District saw a 90.9% volume increase year-on-year (21 sales up from 11 in December 2016), the Buller District saw a 50% volume increase year-on-year (12 sales up from 8 in December 2016), Auckland’s Franklin District saw a 41.4% volume increase year-on-year (99 sales up from 70 in December 2016) and the Waitaki District saw a 32.4% volume increase year-on-year (45 sales up from 34 in December 2016),” continues Norwell.
“When looking at the seasonally adjusted sales volumes in December when compared to November, the figures are far more positive, showing that sales volumes were actually higher than we would anticipate for this time of year,” she continues.
Days to sell
The median number of days to sell a property nationally increased by 1 day (from 31 to 32) when compared to December 2016.
Regionally, West Coast saw the biggest increase in the number of days to sell (up 26 days to 189), followed by Taranaki (up 9 days to 36), Nelson (up 8 days to 29) and Tasman (up 7 days to 30).
Regions with the biggest decreases year-on-year included Gisborne and Southland (both down 3 days to 28 days) and Hawke’s Bay (down 2 days to 27) the lowest number of days to sell for the month of December in 9 years.
REINZ House Price Index (HPI)
The REINZ House Price Index for New Zealand increased 3.8% year-on-year to 2,655. The HPI for New Zealand excluding Auckland increased 6.8% from December 2016 and Auckland’s HPI increased 0.7% for the same period.
The REINZ HPI also showed that five regions (Waikato, Bay of Plenty, Tasman/Nelson/ Marlborough/West Coast, Otago and Southland) all reached new highs during December indicating strong value growth in these areas.
Regions with the highest growth year-on-year were Gisborne/Hawke’s Bay (up 15.0% to 2,332), Southland (up 13.4% to 2457) and Manawatu/Wanganui (up 11.0% to 2,437).
“As there appears to be less urgency for buyers to purchase a property, as well as for vendors to sell their property, we’ve seen sales count drop and the days to sell increase during 2017. However, as vendors have been holding steadfast to their pricing expectations, we’ve still seen the price of properties going up, which is reflected here in the increased HPI,” points out Norwell.
In December, auctions represented 14% of all properties sold in New Zealand, down from 18% in December 2016. This represents 827 properties sold under the hammer, down from 1,154 properties in December 2016.
Of those 827 properties sold by auction, more than half (55% - or 455 properties) were in Auckland, 13% were in Canterbury (105 properties), 8% were in Waikato (68 properties), 4.5% were in Wellington (38 properties) and 4% were from Otago (29 properties). The remainder were spread across the rest of the country.
The number of properties available for sale nationally increased by 9.3% (from 22,521 to 24,610) compared to 12 months ago, and for New Zealand excluding Auckland the number of properties available for sale increased by 2.1% (from 15,784 to 16,113).
Regions with the largest increase year-on-year in the number of properties for sale were Auckland (up 26.1%), Wellington (up 21.0%) and Canterbury (up 18.6%).
Regions with the biggest decrease year-on-year in the number of properties available for sale were Taranaki (-17.7%), Hawke’s Bay (-14.9%) and West Coast (-12.2%).
“Even though Wellington saw one of the biggest increases in inventory, there is still only 7 weeks inventory left – the least in the country, which is a pattern the region has been experiencing for some time now. Additionally, the Hawke’s Bay only has 9 weeks’ inventory available, highlighting the popularity of the area,” points out Norwell.
Between December 2016 and December 2017, the number of homes sold fell in every price bracket except for the $2million to $2.99million category which increased by 4.3%. During December, 96 properties were sold for between $2million - $2.99million, up from 92 properties in December 2016.
The number of dwellings sold for less than $500,000 in December 2017 fell by 18% compared to December 2016 from 3,148 to 2,577 representing 43.7% of all homes sold across the country.
“Only 560 properties across the country sold for less than $250,000 – a 29.9% drop from December 2016. This was the lowest number of properties in this bracket on record, showing how price increases are impacting across the regions,” concludes Norwell.