House prices and sales volumes bounced back in February - REINZ

Property

Slightly more buoyant housing market in February as sales volumes and prices rose

14th Mar 18, 9:44am by Greg Ninness

The housing market bounced up in February with the volumes of homes sold running ahead of February last year and prices also improving versus January, according to the Real Estate Institute of New Zealand.

The REINZ recorded 6373 residential property sales in February, up 1.2% compared to February last year, while the national median price was $530,000, compared to $520,000 in January.

That puts it the national median price up by 3.9% compared to February last year.

Homes also became slightly easier to sell, with the median days needed to make a sale dropping from 46 in January to 44 in February.

The latest figures will bring some welcome relief for the real estate industry, which suffered lacklustre sales volumes and soft prices for much of last year.

In Auckland, 1600 homes were sold in February, slightly up from the 1568 that were sold in February last year. But that's still well below February in 2012 to 2015 when more than 2000 homes were sold each month, and below February 2016 when 1819 homes were sold.

Around the country, the volumes of properties sold in February was up compared to February last year in Auckland, Bay of Plenty, Hawke's Bay, Manawatu/Whanganui, Wellington, Nelson, Marlborough, West Coast, and Southland, and down compared to February last year in Northland, Waikato, Gisborne, Taranaki, Tasman, Canterbury and Otago.

Median prices were up compared to January in all regions except Taranaki where they dropped from $365,000 to $350,000, Tasman which was down from $550,000 to $530,000 and Otago where they fell from $464,000 to $400,000.

However although median prices remain ahead of where they were in February last , they remain below the record highs that were set last year in all regions except Hawke's Bay, which hit a new record high of $444,000 in February.

The graphs below chart the monthly median price movements and volumes sold for all regions of the country.

Median price - REINZ

Select chart tabs

Source: REINZ

Volumes sold - REINZ

Select chart tabs

Source: REINZ

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88 Comments

by Yvil | 14th Mar 18, 9:56am 1520974565

Let's not get ahead of ourselves because house prices have risen from January. Just as I said the same about the January prices being down on the December prices. It happens every year. To have a meaningful comparison we need to compare prices with the same month a year ago.
For example, March prices will be up on Feb prices... it doesn't mean much, we need to compare yoy

by Boatman | 14th Mar 18, 10:32am 1520976777

@yvil ............ nonsense , quite simply since December house prices have actually surged resulting in Auckland house prices going up a staggerring 8,4% in the year to February .

That unrealised gain in the case of our home , equates to about twice our annual household income before tax .............. its ridiculous and unsustainable .

Compound that over a 30 year mortgage and see where it ends up .

Who is the Government going to blame ?

With immigration actually INCREASING since they took office , its a case of WTF are they doing to curb this lunacy ?

by Pragmatist | 14th Mar 18, 11:26am 1520979974

Where do you get your 8.4% figure from?

the only 8,4% figure i see on the REINZ press release is median price ex auckland.. Auckland median price yoy is +3.7%.

In another comment you mention YTD instead of yoy.. but that also wrong. the chart on this page shows median is slightly down since dec 17.

by murray86 | 14th Mar 18, 12:47pm 1520984833

don't worry about your unrealised gain in value Boatman, Cullen will tell the Government to send you a tax bill for it and call you a rich prick. He'll be supported by TOP and GM who'll say serves you right for not renting.

by Yvil | 14th Mar 18, 1:09pm 1520986154

Boatman, can you please share your source showing 8.4% house value increase in Auckland since December 2017, thanks

by Ex Expat | 14th Mar 18, 9:56am 1520974599

Cue one hundred plus posts arguing that the figures confirm their bias.

by vman | 14th Mar 18, 10:10am 1520975440

LOL...so very true,same people same biased arguements

by RickStrauss | 14th Mar 18, 10:21am 1520976065

Next in this sub-thread: a bunch of mutually congratulatory "Well said, _______" comments.

by Ex Expat | 14th Mar 18, 10:28am 1520976534

Don’t forget the uptick bait post from someone left of centre.

by vman | 14th Mar 18, 10:50am 1520977814

And the uptick bait post from the right..

by Ex Expat | 14th Mar 18, 10:55am 1520978148

Not worth the effort as the voters on this site appear to be overwhelmingly left of centre.

by RickStrauss | 14th Mar 18, 3:44pm 1520995490

From all appearances it does seem to be worth the effort.

by Ex Expat | 14th Mar 18, 4:38pm 1520998683

Haha, I’ll treasure my likely brief moment of popularity.

by swapacrate | 14th Mar 18, 9:19pm 1521015560

I think most are swing voters

9 Years of one Government doing a good job of changing NZ into something unrecognisable from when I was kid, may make me seem like a left voter. But with house prices as they are in the stratosphere, unlimited immigration, traffic jams up the wazoo, and homelessness at a record high, its hard to stay enamoured with a National government I had the misfortune of voting in.

by RickStrauss | 14th Mar 18, 4:41pm 1520998881

Only from those left of centre, of course ;-)

by Nzdan | 14th Mar 18, 9:57am 1520974621

Happens every February, by a very similar magnitude. Hardly breaking news.

by RickStrauss | 14th Mar 18, 10:00am 1520974843

Things still moving along slowly but inconclusively, really.

by KBKIWI | 14th Mar 18, 10:01am 1520974879

@ Nzdan: Prices increase year-on-year every February by a similar magnitude? That is incorrect.

by Boatman | 14th Mar 18, 10:36am 1520977009

@ KBKIWI ......... thank you for pointing this out .

The surge in Auckland house prices is a year to date figure of 8,4% ......thats twice the cost of borrowed money in capital growth .............. tax free .

There is no better investment on the planet right now

Its a no -brainer to buy property , and as long as immigration hits monthly records , it will will remain a no-brainer

by Pragmatist | 14th Mar 18, 11:17am 1520979437

Year to date.. for February. getting a little ahead of yourself aren't you.

Look at the REINZ HPI.. auckland up 1.1% yoy. , nz ex-auckland up 6.9% So it looks like in auckland the top end of the market is still selling well skewing the raw median, but comparing similar property types the gains are much lower, and slightly below CPI inflation.

by tgcam4 | 14th Mar 18, 1:00pm 1520985641

I think Boatman is looking at the median ex-auckland which was up 8.4% (auckland up 3.7% yoy)

by rjn1 | 14th Mar 18, 8:15pm 1521011749

Wait, Boatman - your cost of funds is 26%????

I'd be changing banks (or calculators).

by Yvil | 14th Mar 18, 1:11pm 1520986315

Actually nzdan is quite right, please look at the graph provided, place your pointer on the line to see exact dates

by Groen_mamba | 14th Mar 18, 10:02am 1520974925

The real change is in days to sell in Auckland increased by 6 days to 49 days. Highest in 9 years!!!!!!

by Boatman | 14th Mar 18, 10:39am 1520977178

But Groen ............ the prices are still beating records ............ it sheer lunacy

Our home is valued at $2,0 million , and an 8,4% increase in value which would be tax free if we sold , would equate to more than our entire household income for the year BEFORE tax

Its sheer lunacy

by notaneconomist | 14th Mar 18, 11:10am 1520979054

What would it cost you to buy a section of same size and build exactly what you have Boatman?

If you sold would you be downgrading from e.g. location, size building type etc? Do a like for like analysis and you might find that your valuation increase is completely justified given the high costs that are involved with anything housing.

by Yvil | 14th Mar 18, 1:03pm 1520985791

Very good comment notaneconomist, to all the people who say houses are overpriced (and they are compared to incomes) I say, I will agree when you can buy the land in the same location and build a similar speced house including all fees, for less.

by mfd | 14th Mar 18, 3:29pm 1520994591

I think for the most part when we complain about expensive houses, we are complaining about expensive land. It's not the cost of the house itself that causes Auckland to be twice as expensive as most of the rest of the country. It's the land cost that needs to be dealt with.

by Houseworks | 14th Mar 18, 6:53pm 1521006797

And why is developed land so expensive mfd? Government should be looking at themselvs here. Central Government for the gst there's 60k on 400k section and council for the massive contribution fees not to mention add 20k water connection charges. So all up 150k give or take

by Houseworks | 17th Mar 18, 9:07am 1521230820

Just booked a hamilton council drainage inspection. Earliest date is 6 April 2018, that's over Three Weeks from now for a half hour appointment! Imagine calling 111 and being told we will be there next week :)
The government has absolutely no chance of meeting or beating their ambitious house construction targets imo

by swapacrate | 14th Mar 18, 9:31pm 1521016307

They are not overpriced, they are unaffordable, on current incomes and lending criteria. Especially for FHB who have to save deposits.

by Groen_mamba | 14th Mar 18, 11:26am 1520979989

I know, but it seems the standoff intensifies. This cannot continue forever though. Are we heading for 100+ days average to sell? The banks have "manufactured" the last breath in this market, by increasing LVR lending volume above 80%, and fighting for market share with reduced interest rates. At some point these initiatives will also hit a sealing, and there will be no additional capacity to lend, as all potential FHB's will be tapped out. Unless overseas money flows into this market, prices will be on shaky ground.

by swapacrate | 14th Mar 18, 9:38pm 1521016690

Yep cost of borrowing for banks increase, lower mortgages to get market share. Banks profits go down, risks increase with stalling hosing market, somethings got to give.

by tgcam4 | 14th Mar 18, 12:59pm 1520985550

8.4% is NZ excluding Auckland, Auckland's median was up 3.7% yoy. Groen was referring to auckland

by PitU | 14th Mar 18, 1:46pm 1520988419

The bounce has been made possible by the banks. Thank you, banks for keeping the interest rates low for a little longer. Please don’t increase them in the near future.., our beautiful and unique driver of property demand.

https://youtu.be/f1Ift5Hg-C4

by Yvil | 14th Mar 18, 1:27pm 1520987267

Thank you very much for the link, very intersting indeed

by CN | 14th Mar 18, 4:19pm 1520997578

PitU,

Thank you for sharing that great video.

Even with falling interest rates, we are already seeing credit restrictions, particularly for property investors. APRA regulations implemented in March 2017, have made the large 4 Australian owned NZ banks tighten credit by applying tighter loan criteria when assessing borrower applications. This is particularly acute for interest only loans which are coming to the end of the interest only period and going onto P&I terms resulting in 30-40% increase in payments. Many part time property investors are finding out the hard way that lending conditions can change and now have changed and that it is now very difficult to refinance into another interest only loan.

The supply of credit has fallen due to tightening lending criteria by the banks. There may be demand for credit by property investors however they are unable to get credit due to the tightening of loan criteria.

Regarding supply and demand for property inventory in Auckland. Previously in Auckland, up to 40% of property purchases were being purchased by property investors & traders. With credit supply drying up, many of these buyers are no longer active buyers in the Auckland property market. In fact, with their interest only loans turning into P&I loans, they are now becoming potential property sellers and supply property inventory to the market. So property investors who were previously a large proportion of demand for property inventory (due to the previous easy availability of credit) are now becoming suppliers of property inventory in Auckland. This is a key dynamic not discussed and frequently missed by many property market commentators when discussing property market demand and supply, possibly as it is very unpredictable.

If interest rates rise, or there is a unexpected external shock such as the GFC (which results in an economic slowdown and job losses), then there is potential for more highly leveraged property owners to come under financial pressure and the supply of property inventory to the market increase, while the demand for property inventory falls further due to potential further tightening of credit, or inability to obtain credit.

by Bobster | 14th Mar 18, 4:22pm 1520997756

Yeah I’ve seen that one. If you accept that accomodation demand is a material but not key driver of house prices our rental market makes sense ie increases in rentals but nowhere near reflecting price increases. It’s all about credit.....which I don’t find at all comforting

by Houseworks | 14th Mar 18, 6:51pm 1521006696

If this were true how would the magic money be shown in a banks accounts as there would be no entry on the opposite side of the ledger

by theglc | 14th Mar 18, 10:16am 1520975800

Still the 2nd worse Feb for sales numbers in Auckland since 2011

quote from NZ Herald "Auckland saw the median days to sell a property increase by six days to 49 - the highest number of days it's taken to sell a property in Auckland for nine years."

Trade me listings for Auckland over 12200

Forget about the medians, it means nothing when properties are not selling

Auckland RE market is in the doldrums, no doubt about it

by Zachary Smith | 14th Mar 18, 10:20am 1520976052

........properties are not selling.

1600 sold in Auckland in February.

by theglc | 14th Mar 18, 10:35am 1520976901

thats 13% of the inventory. Based on that there is currently 8mths worth of inventiory!!!

by Zachary Smith | 14th Mar 18, 10:39am 1520977193

Using your method of calculation how many months of inventory do we normally have?

by theglc | 14th Mar 18, 11:13am 1520979221

In 2015 & 2016 it was consistently around 10 - 12 weeks

by Zachary Smith | 14th Mar 18, 11:23am 1520979823

2015 and 2016 weren't exactly normal though were they? That was like the hottest time in the market. It seems unreasonable to think that a market should remain scorching hot forever. Perhaps things are just normal now. 1600 houses sold in Auckland in February is still a fair number.

by theglc | 14th Mar 18, 11:44am 1520981067

Yes inventories were as low as 5500 during those times

Long term average from 2007 is around 23 weeks, so no its alot above the norm!

currently around 35weeks. During 2008 & 2011 Post GFC it averaged around 45 weeks so its really getting up there

by Zachary Smith | 14th Mar 18, 10:17am 1520975851

nb4 TTP, the time to buy is now while it is still a bit of a buyer's market.

by theglc | 14th Mar 18, 10:30am 1520976611

Knock yourselves out

by Averageman | 14th Mar 18, 10:58am 1520978308

Yep, leverage up and go for it.

by FamilyGuy | 14th Mar 18, 10:25am 1520976301

If you understand statistics, you know that if you torture your data enough, you can get any result you want. Since last few months, success rates at auctions have been below 50%, then why it appears that prices are going up? Houses in the upper end (more than 1.3 mil) are selling well and that is what driving the average and median prices, but that cannot go on forever. Anyways, we always pay attention to what we want to hear. good luck folks!

by JRSNZ | 14th Mar 18, 10:53am 1520978000

by JRSNZ | 14th Mar 18, 10:52am 1520977979

Anecdotal evidence suggests the same in Hamilton. The higher end properties $750k+ are selling well, whereas anything under $550k is stale.

by vman | 14th Mar 18, 10:56am 1520978185

Totally agree FG,data is manipulated to suit the presenters bias.
It would be good to see it broken down into bands, $500-600k,600-700 etc.
I'll bet that lower end is not doing well at all.
The true indicator is sentiment,nobody is crawling over each other to buy,there is not much competition for a $700k renter in Clendon,no FOMO...RE's look a little sad standing in there open home feeling lonely...

by blue meanie | 14th Mar 18, 10:59am 1520978370

All the houses that had long time ‘for sale’ signs on the North Shore now have ‘sold’ signs. Clearly someone is buying the houses. So tragically, the doom and gloomers are correct. Prices are still rising and if you’re a tenant, Zach/DGZ, ex-expat et al, are rubbing their hands with glee... they’re about to raise your rent and squeeze home heating, or some other ‘nonessential’ out of you.
It is after all your fault for not buying 20 years ago. So it’s your fault if your family does without, so your landlord can lead an ‘enviable’ lifestyle...

by Carlos67 | 14th Mar 18, 11:18am 1520979538

Yep I'm on the North Shore and there is plenty for sale but they are selling.

The graph is STILL going in only one direction, the upward trend continues.

Sure its crazy but when will it end ? Seriously we could be looking back in 10 years going wow the house prices were cheap in 2018, they had it easy back then !

by doublehelix | 14th Mar 18, 11:27am 1520980075

I'm not seeing the same trend you are. From REINZ data, for North Shore, Feb 2016 median was 940k (Feb 18 991k). Feb 16 double the sales volume of Feb 18. Slim increase over 2 year period. Still very low volumes (historically) I reckon prices haven't gone up much over 2-3 years. Who knows what will happen in the future, new listings low and seems to be a few vendors delisting properties that don't sell.

by Eco Bird | 14th Mar 18, 11:29am 1520980163

Exactly, just like we looked bach in 2003 at house prices in 1994 and they looked so cheap back then , the same in 2013 .... No matter how long you look back, any Auckland property Graph shows the same trend - and that is going up in the long run.

I have noticed that sold signs are almost everywhere on the North Shore , from few examples I see they are selling close to current CV. ... North Shore is steady as she goes which would be expected after 60-70% appreciation in the last few years.

by Pragmatist | 14th Mar 18, 11:37am 1520980675

Are you expecting massive wage inflation (sounds good to me) or are you expecting mortgage interest rates to keep dropping from what are already historic lows to enable that to happen?
How are Auckland workers going to service a mortgage on a median ~2 million dollar property in 10 years if house prices keep going up and neither of those happen?

Its not sustainable.. it will have to normalise eventually. Just a matter of waiting to see what kicks off the crash.. or maybe the gains stop and it flatlines for 6-8 years while incomes catch up.

by Bobster | 14th Mar 18, 1:35pm 1520987705

To be clear, a return to long term averages for rent and income ratios assuming prices are flat and wage growth at current levels would literally take decades. It’s so unlikely that I would put the chance of a benign deflation of this bubble as pretty much zero.

by tgcam4 | 14th Mar 18, 1:12pm 1520986320

yup and if wages and rent rise faster to catch up to fundamentals, interest rates will go up and asset prices will likely do the opposite

by Ex Expat | 14th Mar 18, 12:24pm 1520983491

For the record, I own one property, my home. I never want to be a landlord or a tenant or even own a second property like a Bach. I’m interested in the market truth (as I witness it in the Eastern Bays bubble) but really couldnt care less outside of that. Tomorrow I’m having coffee with an agent who has sold 7 houses in the last two weeks. I’ll specifically grill him on who is buying and who is selling. The majority of his sales are $2 million plus.

by tgcam4 | 14th Mar 18, 1:07pm 1520986024

What was I thinking at 9 years old, I should've bought then!

by Double-GZ | 14th Mar 18, 2:02pm 1520989367

Don't get me started. Just go with the upward flow LOL!!

by Chairman Moa | 14th Mar 18, 11:24am 1520979840

Damn it, I should have listened to my RE agent and bought a house last month.. I guess I've missed the boat!

by Robt. | 14th Mar 18, 11:42am 1520980947

Ok, I know everyone has his own bias and trends change but the annual January median price lows and annual February near-lows have been steadily moving up. March results will be interesting.

by Yvil | 14th Mar 18, 1:33pm 1520987583

March results will be higher than February. It's simple, just look at the graph provided, it happened every year for the last 5 years. Now if values will be down in March over Feb, then it is a strong sign that house prices will go down over the medium term

by tgcam4 | 14th Mar 18, 3:02pm 1520992950

In Auckland, March will be interesting because in order for there to be a positive median yoy % increase, prices will have to increase by $47,000 or a 5.5% increase between February and March. I suppose this is possible but it seems unlikely to me. I'll have to wait and see.

by Tui12 | 14th Mar 18, 12:12pm 1520982772

About to sell a family home in AKL so will let you know how easy or hard it will be. My thoughts are that the market is way down on this time last year and AK is very much correcting.

by lalaland | 14th Mar 18, 1:06pm 1520985978

by Chairman Moa | 14th Mar 18, 1:02pm 1520985734

According to REA, there are 6748 active and 3189 inactive RE agents in Auckland. With only 1600 properties sold in Feb, no wonder our food banks are under great stress!

by tothepoint - d… | 14th Mar 18, 1:34pm 1520987699

Auckland is a very large housing market.

Inevitably, some suburbs will show bigger price increases than others.

Houses in the inner-city suburbs are likely to show the greatest increases in value - because the convenience factor will be the major drawcard as Auckland expands further.

TTP

by Yvil | 14th Mar 18, 1:40pm 1520988030

Greg, you state "that puts the national median price up by 3.9% compared to February last year"
The REINZ report states:
"The median house price for New Zealand rose 6.9% in February to $530,000 up from $496,000 in February 2017 according to the latest data from the Real Estate Institute of New Zealand (REINZ)"
Maybe a typo?

by Pragmatist | 14th Mar 18, 2:33pm 1520991208

6.9% is National excluding Auckland.
3.9% is National including Auckland.

edit: whoops, those are the REINZ HPI figures.

raw medians are
Auckland +3.7%
National +6.9%
Nat ex Auckland +8.4%

by Yvil | 14th Mar 18, 2:58pm 1520992680

I don't understand "seasonally adjusted prices" when they compare with the same month of the previous year, can someone please explain, thank you. (why are they different from year-on-year prices?)

by THE MAN 2 | 14th Mar 18, 2:03pm 1520989437

Canterbury prices up once again
Christchurch is growing and prices will never be cheaper!
The man advises to invest in Christchurch!

by nymad | 14th Mar 18, 2:07pm 1520989636

That's essentially no different to saying "New Zealand prices are up once again. Invest in Waiouru."

by Nzdan | 14th Mar 18, 2:55pm 1520992558

“We have a good number of new stock coming
to the market daily, especially in Christchurch
and it includes properties in all price ranges.
Investors are looking to sell lower end stock that
will not meet the new standard and more people
appear to be selling rental investments when the
tenants move out. Therefore, the first home buyer
section of the market is performing reasonably
well. With more for them to choose from, they are
taking their time shopping around. Days on the
market for properties has increased, especially
for anything overpriced, even if it’s only slightly
overpriced. Looking ahead the market looks good
until Easter.”

Jim Davis
REINZ Regional Director

Christchurch City Median Sales Prices
Feb 2017 - $452,000
Feb 2018 - $453,000

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2018/Reside…

by Carlos67 | 14th Mar 18, 6:37pm 1521005867

Christchurch was great until the earthquake, I even thought about moving down there years ago but the quake killed any intention of me ever moving down there.

by THE MAN 2 | 14th Mar 18, 7:08pm 1521007681

Christchurch is still great.
The people are friendlier than the average Aucklandite!

by vman | 14th Mar 18, 3:07pm 1520993233

WTF...I just went out and signed up for some property based on the experts in here,then this headline pops up in here:
https://www.interest.co.nz/property/92616/harcourts-average-selling-pri…

by Yvil | 14th Mar 18, 5:15pm 1521000914

and...

by THE MAN 2 | 14th Mar 18, 4:37pm 1520998643

CHCh prices very stable and represent amazing value.
Gordon not dropping as you keep saying.
Your expert advice shows that you know nothing about property when you say that wise investors should have bought in Dunedin and not Chch!
Amazingly you must have put the buyers off as the median dropped by 64k in one month being a drop of 14% in a single month!
Great tipping Gordon, you know your stuff!!!

by vman | 14th Mar 18, 4:45pm 1520999149

TM2,why don't you pop in and give your opinion on the other article in here today:
https://www.interest.co.nz/property/92616/harcourts-average-selling-pri…

by THE MAN 2 | 14th Mar 18, 5:44pm 1521002675

Vman, what is there to comment On?
Auctions results are not a true reflection of the real estate market!
You can do anything with stats depending on what sells.
Personally love buying at Auctions as you can often get absolute bargains as vendors are motivated to sell on the day.
Opportunities are around when the market is stable and vendors are more motivated.

by vman | 14th Mar 18, 7:15pm 1521008126

?? that wasn't about auctions,it was harcourts saying things were soft ...Auckland being down 4.74%

by vman | 14th Mar 18, 7:29pm 1521008948

The one trueism in your statement is that you can do anything with stats to suit your position,which is why most peoples ramblings in here are not worth reading,hard to find anyone totally neutral...

by gordon | 14th Mar 18, 7:54pm 1521010497

I see the Dunedin median price is up nearly $6,000.00 and the Lakes median price is up $13,000.00 since January 2018. Those investors who bought there in 2016/2017 have certainly done well.

by THE MAN 2 | 14th Mar 18, 7:09pm 1521007774

Gordon what part of dropping 64k in a month do you not understand???