After reaching a new national high last month, the October sales figures from the Real Estate Institute of New Zealand (REINZ) show the median sale price for New Zealand has eased by $5,000 to $510,000.
By Bayleys national residential manager Daniel Coulson
While much media attention has been lavished on the Auckland property market, we find that activity across the country (excluding Auckland) has experienced positive momentum growing by 9.6 percent to $400,000 when compared with the same period last year.
Coming off the back of last month’s energy which saw six regions achieve new record median sale prices, October’s statistics show three have achieved new heights - with Northland rising 11 percent year-on to $399,000, Waikato/Bay of Plenty lifting a whopping 21 percent to $460,750 and Southland reaching parity with its January 2008 high of $225,000.
The fourth and final record was hit by Auckland where the median house price has risen by $119,750 over the year and now sits at $868,000.
Working together like a playground see-saw, median prices across the country continue to rise higher, while sale volumes continue to plummet – but how?
Plagued by a lack of supply, we have observed that the second half of 2016 has been characterised by a more conservative approach to property sales. And while lending institutions tightened their mortgage criteria – with the aim of reigning in the investor activity seen to be dominating property across the North Island, it appears the changes have had an unexpected side-effect for sellers.
Adopting a ‘wait-and-see’ approach, property owners have so-far bucked the traditional spring trend, holding on to property and bypassing the popular spring listing period in favour of a down to the wire pre-Christmas sale.
While the latest round of loan-to-value restrictions have caused both investors and first-home buyers to pause and take a breath, we have witnessed a higher proportion of the traditionally more expensive owner-occupied stock on the market for sale.
Accounting for 15 percent of total dwellings sold, homes sold for more than $1 million rose by 22 percent when compared with October 2015, while sale volumes for properties under $600,000 continue to fall.
The burgeoning market for luxury off-the-plan developments and apartments selling for top-tier prices appear to be a driving factor for this, and it’s no coincidence that areas experiencing the most development are also recording the largest percentage increase in median prices as the Central Otago Lakes rose by 42 percent last month, trailed by Auckland at 16 percent.
While interest in development remains strong, New Zealand’s economic prospects secure for now and high migration driving the demand for housing, the outlook for the coming summer months is bright and cheery – paving the way perfectly for another wildly successful Bayleys Big Call Auction Week in February.