Super City's prices drop further

Tuesday 14 February 2017

Auckland’s housing market slowdown is highlighted in the latest REINZ data which shows the region’s prices are down while listings are up and sales have slowed.

By Miriam Bell

The Auckland region’s median sale price fell to $805,000 in January, which was a 4.2% decline on December’s median price of $840,000, according to REINZ.

It was the third consecutive month that the region’s median price has fallen.

At the same time, once seasonally adjusted, the number of sales in the Auckland region fell 6% as compared to December.

Further, after months of record low numbers of houses available for sale, the number of properties for sale in the region jumped by 1,135 (or 17%) as compared to January 2016.

REINZ CEO Bindi Norwell said the number of properties for sale in Auckland is certainly rising.

“There is now more than four months of supply now available with a rise of more than a month of supply over the past year.”

However, this lead indicator means greater choice for Auckland home buyers, and prompts us to ask whether the Auckland market is showing some early new signs of activity, she said.

“Market fundamentals remain the same, with a rising population, housing shortage and historically low, although potentially rising, interest rates.

“We await the March data with interest, as a clearer picture will emerge of where the market is likely to head through 2017.”

Auckland’s market continues to buck the national trend.

Nationally, median house prices rose by 9.4% year-on-year to hit $490,000 in January, once seasonally adjusted.

Two of 12 regions hit new record high median sale prices in January 2017: Hawke’s Bay was up 16% to $366,000, while Nelson/Marlborough was up 25% to $470,000.

The number of sales in January were down 6% to 4,307 as compared to December – but this is in line with market expectations for this time of year.

In contrast to Auckland, there were declining numbers of properties for sale nationwide in January, with 3,743 fewer houses for sale as compared to this time last year.

ASB economist Kim Mundy said the REINZ data showed sales activity was weak across many regions in January, with Auckland sales activity particularly soft.

Soft demand, associated with the investor-focused LVRs is slowing sales and also weighing on house price growth, she said.

“We expect to see activity remain subdued over 2017, especially in Auckland where prices are most stretched.”

For Westpac acting chief economist Michael Gordon the REINZ data showed a marked slowdown in the housing market over January.

While January is typically the quietest part of the year anyway, seasonally adjusted figures point to a renewed downturn after some signs of stabilisation at the end of 2016, he said.

“House sales fell 6.7% in seasonally adjusted terms, with the biggest declines coming in some of last year’s hot spots: Auckland, Wellington and Queenstown.

“Altogether, sales are down more than 20% from their peak in April last year.”

Westpac will be keeping an eye on a broad range of housing indicators to see if the weakness in the Auckland market persists, Gordon added.

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