It is the regions that are now driving the national housing market, while Auckland’s market takes a break, according to REINZ’s September data.
The national median house price rose to a new high of $515,000 in September, which was a 3% increase on August’s median price of $492,000.
Once seasonally adjusted, this was a 7% increase year-on-year.
Further confirmation of the strength within regional markets can be seen in the fact that prices outside Auckland have hit a record median high of $400,000 for the first time.
Also, six regions set new records with their median sale prices.
They were Northland ($390,000), Waikato/Bay of Plenty ($458,500), Taranaki ($350,000), Wellington ($480,000), Nelson/Marlborough ($450,000) and Otago ($296,000).
Conversely, Auckland’s median price dropped to $825,000 in September, which was a 2% decline on August’s median price of $842,500.
Auckland’s median price was still up 7% year-on-year, once seasonally adjusted.
However, while median prices remained strong, the number of sales in September fell – both nationwide and in Auckland.
Nationwide, sales were down on August by 2% and by 10% year-on-year and, in Auckland, they were down on August by 3% and by 23% year-on-year.
REINZ spokesperson Bryan Thomson said the market appears to be in something of a two-speed mode at present.
Auckland paused for breath during a wet school holiday period and ahead of likely new Spring growth, he said.
“Meanwhile, across the rest of the country prices continue to rise, still demonstrating strong price and volume growth.”
They are seeing anecdotal evidence that first home buyers in Auckland are now favouring new builds, he added.
This was as a way of getting finance in the light of the Reserve Bank’s new LVR restrictions and the ‘carve out’ for new home construction.
The new LVR rules have taken some heat out of the market, ASB economist Kim Mundy said.
“As earlier data reports suggested, the REINZ data shows that housing market activity cooled in September.”
Around the country – including in Wellington which has the tightest housing market for some time - the seasonally-adjusted median of days to sell was up and, in Auckland, it was at the highest level since August 2014.
Mundy said the lift in the time taken to sell homes comes off the back of a widespread fall in sales activity over September.
In general, recent housing market activity has been supported by robust demand and limited supply, she said.
“However, the latest round of investor-focused LVRs appears to be weighing on market activity.
“We expect this to continue to suppress market activity over the remainder of the year as investors up and down the country come to terms with the new rules.”
Westpac acting chief economist Michael Gordon said the REINZ data highlighted the ongoing effects of the new LVR rules, which have effectively been in force since late July.
Local and international experience suggests that lending restrictions, like LVR limits, tend to have their peak impact over the first six months, he said.
“So we'll keep watching the data before drawing firm conclusions.
“But the market's response to date is in keeping with our view that lending restrictions only have a temporary impact on house prices.”
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