Spring sales lift comes through

REINZ chief executive Bindi Norwell

Nationally, the number of properties sold in November increased by 17.8%, or by 4.5% once seasonally adjusted, as compared to October.

Once Auckland was excluded, the number of properties sold in New Zealand was up by 19.4%, or by 5.7% once seasonally adjusted, on October.

In Auckland, which has been experiencing a significant market slowdown, sales volumes increased by 13.9%, or by 1.5% once seasonally adjusted, as compared to Auckland.

While all regions, except the West Coast, saw their month-on-month sales volume increase, sales in most regions were down when compared to November 2016.

Nationally, sales volumes were down by 9.2% year-on-year once seasonally adjusted.

In Auckland sales fell by 16.1% year-on-year once seasonally adjusted and were at the lowest level for any November since 2010.

REINZ chief executive Bindi Norwell says while there was a significant increase in properties sold, November traditionally sees a robust increase.

But the change in November as compared to October was stronger than they would have expected based on past data, she says.

“After a difficult winter and a slow start to spring, the industry has experienced a lift in optimism and activity, with increases in the properties sold in 15 out of 16 regions across the country when compared to the previous month.”

Sales volumes activity may remain comparatively subdued, but the REINZ data shows that median prices around New Zealand rose, with seven regions seeing record prices in November.

The national median price was up by 1.9% month-on-month and, once seasonally adjusted, by 3.8% year-on-year in November. This left it at $530,000.

Auckland’s median price increased by 3.8% month-on-month and, once seasonally adjusted, by 1.2% year-on-year in November. It now sits at $880,000.

Norwell says that with one of the wettest winters on record and the election, it has been a difficult few months for the industry.

“However, last month has provided the industry with a boost in optimism and confidence which has seen the market return to normal November conditions.”

For commentators, the REINZ data provides further evidence of the housing market’s ongoing improvement.

Westpac chief economist Dominick Stephens says the pickup in house sales and the fact that prices are rising again in Northern New Zealand is no surprise as market conditions have been showing signs of improvement since August.

With the election out of the way and mortgage rates trickling lower and now the added possibility of a rush to beat restrictions on foreign purchases and tax changes a few more months of improvement are likely, he says.

“We expect housing market data to be similarly strong in December and possibly January.

“But over 2018 we expect New Zealand house prices to fall in response to rising mortgage rates and regulatory changes.”

ASB economist Kim Mundy says sales may have picked up but they remain subdued relative to recent levels.

This was particularly the case in Auckland and Wellington – the two cities likely to be most impacted by Labour’s investor-focussed housing policies.

She says house prices firmed in November in many regions as sales are no longer falling sharply and days to sell firmed.

“With a number of opposing forces impacting the housing market at the moment it remains to be seen if this trend will continue.

“If price gains continue, we would expect them to be moderate in the near term, given the uncertainty around impacts of incoming housing policies.”