Sales up but market still subdued: REINZ

The national median house price increased by $9000 from $361,000 in July to $370,000 in August, an increase of 2.5%. 

Auckland’s median house price moved up 1.1 per cent, from the $500,000 level it has stayed steady on for three months, to reach a new record median price of $505,500.  The national median house price is up 4.2% compared to August last year. 

Every region reported an increase in the number of sales in August on the year before. Northland led the way with a 31% increase, followed by Auckland with 25.6% and Taranaki with 22.2%.  Seven regions recorded increases in sales in August compared to July, with Central Otago Lakes recording a 25.0% increase, Southland an 11.2% increase and Nelson/Marlborough an 8.9% increase.  Taranaki recorded a 14.0% fall in sales in August compared to July, with Manawatu/Wanganui recording an 8.2% fall and Wellington a 2.8% fall in sales. 

In terms of prices, Nelson/Marlborough recorded the highest lift in prices for August on the month before with an increase of 9.6%, followed by Taranaki with 7.3%, and Southland with 5.9%.

Compared to August 2011, Auckland recorded the highest lift in prices with an increase of 11.6%, followed by Canterbury/Westland with 6.2% and Wellington with 5.2%. 

The REINZ Stratified House Price Index, which adjusts for some of the variations in mix that can impact on the median price, is 6.1% higher than August 2011 and is now at a new record high.  The House Price Indices for Auckland and Christchurch also set new record highs in August. 

“House buyers in Auckland are increasingly driving the New Zealand real estate market with a widening gap opening up between the dynamics of the Auckland market and the rest of the country.  While both Auckland and Christchurch recorded new record median prices during the month it is the strong sales volume growth in Auckland that is most notable,” said REINZ Chief Executive Helen O’Sullivan. 

“Normally at this time of year we see a dip in sales volumes; this year, apart from the weather, winter was cancelled in Auckland.  Across the rest of the country while we are continuing to see rising sales volumes, prices continue to reflect the general caution around the economic outlook.  In many parts of the country we are also seeing shortages of houses available for sale, often a market feature at the end of winter, although expectations for a rush of listings in the spring are not strong.”

But she said the market was still subdued and prices were yet to catch up to inflation.

“A sure sign that housing market was back to normal levels of activity would be turnover reaching the pre-2008 long-run average. This has yet to happen.”

More sellers are turning to auctions. Nationally there were 1,110 dwellings sold by auction in August representing 18.4% of all sales, up from 588 sales in August 2011 representing 11.3% of all sales.  This is a new national record for the percentage of sale by auction and beats the previous high of 16.2% reached in March 2012.  Auction sales in Auckland also reached a new record with more than one in three sales in the region in August sold by auction.