Are buyers starting to look out of Auckland?

Records fell yet again as Auckland’s median price hit a new high of $755,000 in June 2015, according to the latest Real Estate Institute of New Zealand data.

Over the last year, the SuperCity’s median price has gone up by $155,000, or 26%, from $600,000 in June 2014.

Compared to May 2015, Auckland’s median price rose by $6,000 (+1%) - but, while Waitakere prices went up by 2%, prices fell around the rest of the region.

REINZ chief executive Colleen Milne said the Auckland region continues to experience low listing numbers and strong demand across the spectrum.

She said that, although some vendors were leaving Auckland, there were as many new buyers emerging.

This means the overall supply/demand situation remained more or less static, while the overall trend for the region was improving.

Prices were continuing to rise within Auckland and the inventory situation was very tight, with less than 10 weeks of stock available, Milne said.

“A reduction in the number of offshore buyers due to requirements to have a New Zealand bank account and an IRD number may be having some impact at the top end of the market.

“But, for the bulk of the market, the trends evident over the past 12 months show no signs of abating.”

However, compared to May 2015, sales fell by 11% across the region and by 4% on a seasonally adjusted basis.

Sales fell by 22% in Manukau, by 10% in Auckland City and by 9% in Waitakere and the North Shore.

Milne said there was increasing evidence that Aucklanders were looking out of the region for properties, both as owner-occupiers and for investment properties. 

Regions like Northland and Waikato/Bay of Plenty recorded significant drops in the volume of properties for sale over the past six months, she continued.

“Aucklanders are increasingly being identified as a significant buying group in these regions. 

“Further afield, there is increasing evidence that Aucklanders are making up a larger portion of total buyers.”

Meanwhile, the national median price hit $450,000 in June 2015.

This was an increase of $23,000, or 5.4%, compared to June 2014, but a decrease of $10,000, or 2.2%, from May 2015.

Once the impact of the Auckland region was excluded, the national median price was steady at $340,000 as compared to June 2014.

It was down $9,000, or 2.6%, compared to May 2015.

Westpac senior economist Michael Gordon said the June REINZ data suggested that the nationwide housing market continued to strengthen.

The stratified median sale price has risen sharply - and was now up almost 15% on a year ago, which was the fastest annual rate of growth since May 2007.

House sales were up 0.7% in seasonally adjusted terms, while average days to sell fell to their lowest since June 2013.

However, Gordon said there were some early signs that regional trends were converging.

The June figures hinted at some of the regional trends that might be expected to follow from the Reserve Bank’s impending LVR changes and the government’s upcoming tax measures, he continued.

“House sales in Auckland fell and prices were down slightly - but sales were up in most other regions, with a particularly strong gain in the Waikato and Bay of Plenty.

“This supports the notion that investor demand is starting to migrate from Auckland towards other more affordable cities nearby.”