NZ house prices firm in February, volumes down from a year earlier

Monday 13th March 2017

Median house prices firmed slightly across New Zealand during February with the regions outpacing the nation's largest city of Auckland, according to the Real Estate Institute of New Zealand.

The national median house price increased to $495,000 in February, up 1 percent from January and 10 percent higher on the year. Outside Auckland, the median price rose 7.3 percent from a year earlier, while in Auckland - where prices have skyrocketed up until recently - it was up 6.7 percent. The number of sales in February was 6,253, down 14 percent from a year earlier.

Record low interest rates and record high net migration continue to underpin the nation's hot property market but tighter restrictions for highly-leveraged lending and having an impact, Reinz said in a statement.

Concern about New Zealand's bubbling housing market have prompted policymakers at the Reserve Bank to introduce a series of curbs on mortgage lending and "we hear anecdotally that LVRs are having an effect and banks are reducing lending, becoming more selective about who they lend to, what properties they will lend on and the terms," said Reinz chief executive Bindi Norwell.

Two of 12 regions hit a new median house price record. In Northland the median price across the region rose 20 percent on the year to $421,250 while in Otago it rose 18 percent to $317,250. "The Otago market remains robust with another record median price recorded this month. The demand from investors has reduced, but the slack has very quickly been taken up by local home buyers. First home buyer activity remains steady," said Reinz regional commentator Liz Nidd.

In Auckland, however, the median house price increased 6.7 percent to $800,000 from February a year earlier but slipped 0.6 percent versus January while in the capital city of Wellington the median price increased 16 percent to $520,750.

"Auckland is a mixed picture: there is something in the market for buyers and sellers. Compared to the same time last year, median prices have increased, inventory has increased and volumes have decreased," said Norwell.

Across New Zealand, the total value of residential sales including sections was $4 billion in February versus $4.2 billion a year earlier and $2.7 billion in January. In the 12 months to February, the total value of residential sales was $58 billion.

The number of homes that sold for more than $1 million rose by 5 percent on the year, accounting for 11 percent of all dwellings sold. In comparison, the number of properties sold for under $400,000 fell 26 percent versus the same month a year earlier.

BusinessDesk.co.nz

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