Regions setting market pace

New Zealand’s housing market continued to show strength in December with another high for the national median price and new record highs in a number of regions, according to the REINZ data.

The national median price hit $465,000 in December. This was a small rise of 1.2%, as compared to November, and an increase of 3.3% on December 2014. 

Once Auckland was excluded from the mix, the national median price reached $379,000 – which was its fourth record high in a row.

This was up by just 1.1% on November, but it was an increase of 8%, as compared to December 2014.

December also saw new record median prices recorded in Waikato/Bay of Plenty ($395,000), Hawke’s Bay ($310,500), Wellington ($436,000), Nelson/Marlborough ($390,000) and Otago ($282,000).

Auckland’s median price remained flat at $770,000 in December. It saw a rise of just 0.7%, as compared to November – although its year-on-year increase was 13.6%.

Sales activity in December was down by 9.1% around the country, as compared to November, but up 3.5% on December 2014. 

However, once seasonally adjusted, sales were up 2.9% from November to December, which is stronger than REINZ would usually expect at that time of year.

In Auckland, sales across the region fell by 12% in December, as compared to November, but when seasonally adjusted they were up by 8%.

REINZ chief executive Colleen Milne said the data showed regional markets, particularly Northland, Waikato/Bay of Plenty, Hawkes Bay and Central Otago Lakes, are now setting the pace for New Zealand’s market.

Auckland, in a relative sense, is now in the middle of the pack, she said.

“The decline in Auckland’s sales volume, while noticeable, is likely transitory as the region gets to grips with the new LVR rules for investors… But, while sales volumes have fallen, prices remain firm across the region."

In contrast, over the past six months, many regions recorded significant declines in inventory levels and days taken to sell, and noticeable increases in the median price.

The December data showed that Northland, Waikato/Bay of Plenty and Hawke’s Bay continue to see the most robust sales growth.

Further, compared to December 2014, nine regions recorded increases in sales volume – notably Northland with the largest increase of 39%, Waikato/Bay of Plenty with 30% and Taranaki with 27%.

Milne said the breadth of the improvement across New Zealand suggests there is more is at play than just an Auckland “halo effect”, although that factor has contributed to activity in the northern regions.