The first months of 2017 have been a mixed bag in the property market, but it’s always difficult to predict what the rest of the year will hold until March’s results are delivered. March didn’t disappoint this year and we witnessed a definite jump in activity, volume of sales and median prices, especially in Manukau.
Auckland’s median price broke a new record, as did eight of New Zealand’s 12 regions, demonstrating that real estate is a hot market all over the country. At $890,000, Auckland’s median price was up 8.5% year on year. In Manukau, it was an above average annual price rise with an 11% increase.
The jump in sales volumes from February was fairly staggering, with a 66% increase, which is partly due to the quieter early months of the year. In Manukau the increase was even higher, with volumes rising by 73% over the same period. There is still ample choice around, as the increase in sales was balanced by 47% more listings than the month prior.
Housing supply has grown in Auckland by 23% over the past year, which means there are 1,673 additional homes for sale compared to March 2016. Equating to 20 weeks of supply, this is welcome news for buyers who have a bit more breathing room to shop around and find the right property, instead of feeling pressure to make a purchase. Auckland is still suffering from a housing deficit though, so this won’t swing the balance of power between vendor and purchaser too much in the buyer’s direction. Instead, we can comfortably state that it’s a more balanced market for all parties.
Source: REINZ, April 2017
New Zealand’s passion for property both as a lifestyle and a form of investment mean accurate housing data is sought after by much of the nation.
From now on, New Zealanders will benefit from a greater level of detail and understanding of housing activity over time, with April’s launch of the REINZ House Price Index (HPI). Developed in partnership with the Reserve Bank, close followers of the property market and economic commentators will benefit from the accurate and timely insights provided by this data.
If you’ve taken out a mortgage lately, your approval will already have been based on this data, as the Reserve Bank and other major banks have been using this data too. It’s more accurate and timely, but how is it calculated?
The HPI analyses how prices in a market are influenced by different attributes, including land and floor area, number of bedrooms and so on, to measure housing activity and trends. And because it uses unconditional sales data, rather than at settlement, which can often be weeks’ later, results can be analysed and released earlier. And in the housing market, time is of the essence!
We’re looking forward to providing our vendors and buyers with an enhanced level of information to help their sales and purchase decisions. The REINZ has said that the HPI is the ‘gold standard’ in New Zealand price analysis tools, so we welcome the new index.
While we’re impressed with this quantitative data, we also keep an ear out for the voice of the property market and what our clients tell us. What the market is saying certainly backs up March’s HPI data. We know anecdotally that investors and first home buyers are facing more challenges in securing bank lending compared to a year ago. The results demonstrate that sales of lower price bracket homes are declining, while the million-plus bracket is on the rise. This of course, contributes to the increase in median price that we see in the data.
Source: REINZ, April 2017