National median price rise – thanks to “Auckland effect”

The latest REINZ data shows that there was 8,803 sales in March 2015, which was up 20.3% on March 2014 and up 27.6% on January.

These figures mean that sales hit their highest March level since the boom days of 2007. In fact, sales hit the highest level for any month since May 2007.

An 8.0% rise in the national median price saw it move from $440,000 in March 2014 up to $475,000 in March 2015.

REINZ chief executive Colleen Milne says that, while the increase in the number of sales is basically spread across the country, the movement in the national median price is almost entirely an Auckland effect.

If the Auckland region is excluded, the national median price was comparatively flat – just 1.4% higher than March 2014.

Auckland’s median price rose from $637,000 in March 2014 to $720,000 in March 2015. This was an increase of 13%.

Milne says that Auckland continues to see demand stronger than the available supply, with new developments across the region barely impacting on demand.

“Listings remain very tight across the region, with strong demand for $2m+ properties in the north of the region and investor activity to the south.”

She adds that Auckland has posted a record number of auction sales in March, with almost one in two sales by auction, and that auctions tend to sell for a premium compared to other sales.

The data also shows a noticeable spike in the number of sales over $1 million in Auckland.

“These two effects explain, at least in part, the jump in the national median and Auckland median prices for March – although the underlying demand pressures remain and supply continues to be restrained by low numbers of new listings.”

Milne says that sales volumes and median prices are far better balanced around the rest of the country, with a number of regions reporting good sales numbers, good listings and plenty of activity.

“The national median price, excluding Auckland, has remained at $350,000 for the past two months, indicating that supply and demand are far more balanced outside of Auckland.”

Westpac chief economist Dominick Stephens says the REINZ data shows the housing market has remained strong in March – confirming it is in comeback mode after last year’s soft patch.

“Market activity is much stronger than it was before the election, although the pace of sales is not quite as frenetic as it was immediately after the election.”

He notes that, while house prices are booming in Auckland, they are rising at a more modest pace elsewhere.

“In Christchurch, the pace of house price inflation has cooled considerably to 3.9% over the past six months.”

Stephens also says the REINZ data shows the number of days taken to sell a house has continued to fall. This is consistent with a tight market.