REINZ chief executive Colleen Milne
Following several months at a cooler, more sedate pace, Auckland’s housing market has roared back into action.
The latest REINZ data shows that the SuperCity’s median price rose by 7.7% in March to hit a new record high of $820,000.
Sales volumes were also up by 66.8% on February, although they were down by 21% on March 2015.
REINZ chief executive Colleen Milne said the rebound of Auckland’s prices in March indicated that recent fears of the Auckland market cooling off have been overstated.
“The slow-down in sales volumes after the introduction of tax and LVR changes last year appears to be coming to an end, with a significant lift in sales for March and a further uplift in the median price.”
However, it wasn’t only Auckland that turned in a record breaking performance in March.
Regions around the country hit new record median house prices, while the national median house price rose to $495,000.
This was a 10% increase on February’s national median price (of $450,000) and a 4.2% increase on the March 2015 national median price.
Along with Auckland, Waikato/Bay of Plenty, Wellington, Nelson/Marlborough, and Central Otago Lakes all reached new record median prices in March.
Canterbury/Westland hit its record median price for the third time after reaching it in April 2015 and January 2016.
Sales volumes were up nationwide too. March saw 9,527 sales, which was up 30.7% on February and up 8.2% on March 2015.
Ten regions saw increases in sales volumes, as compared to February, while ten regions saw increases as compared to March 2015.
Milne said Auckland’s strength was leading to a growth in the “halo effect” which continues to flow on to other regions.
“Right across the country regional markets have been strong with a large number of record medians and the strongest sales for nine years for most regions.”
The data points to a generally robust real estate market across New Zealand, with Auckland in recovery and anecdotal evidence of surging investor demand in a number of regional markets, she said.
Westpac chief economist Dominick Stephens agreed the data shows March was a very strong month for the country’s housing market.
He said that, for some time, prices have been rising sharply in most parts of New Zealand outside of Auckland and Canterbury, and that trend continued in March.
But the big change this month was Auckland, he said.
“Most of the increase in sales was in Auckland, and Auckland recorded the biggest lift in prices, 3.4% in the month.
“This means Auckland house prices are nearly back to the peak level reached in September 2015.”
While other data sources and anecdotal evidence had foreshadowed the upturn in the Auckland market, the REINZ data was more positive for Auckland than anticipated, Stephens said.
“This strength of the housing market is problematic for the Reserve Bank, and may give them pause for thought about the pace and/or extent of further OCR reductions.”
He added that the big increase in the national median price in March was sure to garner headlines, but it is not seasonally adjusted and does not control for the composition of sales.
“Much of this lift in median price probably just reflects the fact that a greater proportion of the houses were located in Auckland, where house prices tend to be higher.”
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