Decline in sales nationwide

Monday 14 November 2016

Residential property sales have dropped nationwide and yet median prices have set new records in several regions, the latest REINZ data shows.

By Miriam Bell

In October, nationwide sales volumes were down on September by 9% and by 14% year-on-year.

Once seasonally adjusted, sales fell by 2% from September to October – which was an indicator that sales were lower than what would be expected for the time of year.

Auckland sales dropped by 12% on September and by 16% year-on-year, while Waikato/Bay of Plenty saw a 25% decrease in sale year-on-year.

Alongside the fall in sales, the national median price fell by $5,000 to $510,000 in October.

Once seasonally adjusted, this meant the national median price was down by 1% on September and up by just 1% year-on-year.

However, four regions – including Auckland – still hit record high median prices, despite the decline in sales.

Auckland’s median price reached $868,000 in October, as compared to $825,000 in September.

Once seasonally adjusted, this was a 5% increase on September and a 17% year-on-year increase.

Three other regions returned record median sale prices in October.

They were Northland which hit $399,000, Waikato/Bay of Plenty which rose to $460,750 and Southland which equalled its record high of $225,000 reached in January 2008.

REINZ spokesperson Bryan Thomson said that while Auckland experienced a lot of strength in the upper end of the market, the lower end appeared to be wavering due to the impact of LVRs.

The data suggested that the impact of the revised LVR rules is having more of an effect on lower-priced sales, as compared to higher priced sales, he said.

This is because there has been a surge in the percentage of sales over $1million and a noticeable decline in the number of sales below $400,000 as compared to 12 months ago.

Thomson said some of this change may be reflective of the overall uplift in prices over the past year as the market for higher-priced properties is continuing as normal.

“But the market for lower priced properties is becoming more difficult for both buyers and sellers.”

The REINZ data also shows the number of properties available for sale across all regions in New Zealand fell by 24% between October 2015 and October 2016.

Wellington has the fewest properties for sale with six weeks of supply, closely followed by Hawke’s Bay with under 10 weeks supply, Otago and Nelson/Marlborough with 11 weeks of supply.

Thomson said there is some evidence that the normal spring “bounce” in the number of listings has so far been quite weak this year.

“One possible reason for this is that the revised rules could be making it harder for people to know whether to sell, as they wonder if there are buyers about, so they hold their properties back from the market.

“This could have the result that we’re seeing, which is that supply falls but the demand is still there, so prices keep rising.”

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