Declining sales, subdued market

The Auckland region’s median sale price fell to $840,000 in December, as compared to $851,944 in November.

While this was a decline of just 1.4%, once seasonally adjusted, on November, it was the second month in a row the region’s median sale price has dropped.

Despite this recent trend, Auckland’s median sale price, once seasonally adjusted, was up by 9.1% year-on-year.

Sales volumes in the region were also down – both on November and year-on-year.

Once seasonally adjusted, Auckland sales volumes in December were 2% lower than in November.

However, REINZ chief executive Bindi Norwell said that Auckland’s long-term median price trend has been consistently rising, despite a slight easing compared to November.

“The combination of fundamental factors, such as strong underlying population growth and a lack of supply in the market to meet Auckland’s growing population, suggests that we may be unlikely to see much change to the upward trend in prices unless these fundamentals change.”

Markets around the rest of the country returned a mixed bag of data.

The national median sale price dropped to $516,000 in December – as compared to November’s record high of $520,000.

Once seasonally adjusted, the national median sale price was up by 0.4% on November and by 11.8% year-on-year.

Five regions hit record high median sale prices in December. They were Northland, Hawke’s Bay, Wellington, Otago, and Southland.

Wellington recorded the largest year-on-year increase in median price with a rise of 22%. It was followed by Nelson/Marlborough (up 17%) and Waikato/Bay of Plenty (up 17%).

National sales volumes were down by 11% year-on-year – although, once seasonally adjusted, the fall was less than 1%.

Norwell said the underlying trends they are seeing are of rising prices across New Zealand, with all regions recording year-on-year increases in the median price.

“By contrast we are seeing flat or falling sales volumes in many areas of the country.”

Wellington’s housing market is currently a standout performer.

Norwell said it has been experiencing strong house price growth.

“Median prices in the region have risen nearly $100,000, or 22%, over the past year to hit a new record of $530,175, even with sales volumes rising since November.”

However, economists noted the evidence of slower sales activity contained in the REINZ data.

ASB economist Kim Mundy said sales activity was weak across many regions in New Zealand, with Wellington a key exception.

This was impacting on house price growth, she said.

“The latest round of investor-focused LVR restrictions appear to have weighed on market activity.

“We expect house price growth to be muted over 2017, but robust demand and limited supply will continue to provide a floor to house prices.”