The Real Estate Institute of New Zealand (REINZ) says the national median selling price for homes sold in July was $416,000, down 2.6% on June's median, but still up 8.1% on the median price in July last year.
But the reverse was true for the number of homes sold, with 5893 sales in July, which was up 2.3% on the number of sales in July but down 13% on July last year.
Nationally the number of days required to sell a property declined from 39 in June to 37 in July. In July last year it was 35.
REINZ chief executive Helen O'Sullivan said the market was firmly in winter mode, with a limited number of new listings and activity muted across the country.
"Sales volumes picked up a little in July compared to last month but this is about in line with the normal seasonal pattern," she said.
"Rising interest rates and the forthcoming election are probably also influencing buyer behaviour."
Selling prices in July were down compared to June in most parts of the country, with Auckland, Taranaki, Otago and Southland bucking the trend and showing price gains in July.
In the overheated Auckland region the median price was $610,000, up $10,000 on June.
All parts of the region showed price gains except for the North Shore, where the median dropped from $747,000 in June to $714,000 in July.
The biggest gains were made in the central suburbs that comprise the former Auckland City Council area, where the median price increased from $655,750 in June to $692,000 in July.
The median price in the Auckland region has now increased by 10.5% over the last year.
However the number of homes sold in the Auckland region declined to 2240 in July, down 3.8% on June and down a whopping 18.7% compared with July last year.
In Wellington the median price was $380,000, down 1.3% compared with June.
Prices throughout the region were mixed, with areas such as Lower Hutt posting a 12.3% decline for the month while the median price in Pukerua Bay/Tawa was up 14%.
The number of sales was up, with 621 homes selling in July, up 10.3% compared with June and 1.3% compared with July last year.
In Christchurch the median price was $407,250, a decline of 5.4% from June's median of $430,000.
However the volume of properties sold in Christchurch was up 8.1% compared with June and up 4.4% compared with July last year.
July's median selling prices in the main centres, with percentage changes since June and since July 2013:
| Whangarei | 266,500 | -7.9 | -4.8 |
| Rodney | 590,000 | 1.7 | 11.3 |
| North Shore | 714,000 | -4.4 | -1.3 |
| Waitakere | 550,000 | 4.7 | 14.1 |
| Former Auckland City Council area | 692,000 | 5.5 | 16.8 |
| Manukau | 570,000 | 1.8 | 5.9 |
| Hamilton | 350,000 | -1.1 | 1.4 |
| Tauranga | 360,000 | -11.1 | 14.3 |
| Rotorua | 250,000 | 6.4 | -1.8 |
| Taupo | 345,000 | 3.8 | -6.1 |
| Gisborne | 250,000 | 7.1 | 26.9 |
| Napier | 313,000 | -3.7 | 6.1 |
| Hastings | 263,000 | -2.5 | 5.2 |
| New Plymouth | 332,500 | -3.9 | 3.1 |
| Palmerston North | 282,000 | 4.3 | -1.1 |
| Levin | 185,000 | 5.7 | 19.4 |
| Wanganui | 147,500 | -2.3 | -22.4 |
| Upper Hutt | 324,250 | 6.3 | -1.7 |
| Hutt Valley | 315,750 | -12.3 | -0.6 |
| Northern Wellington | 427,000 | -7.0 | -7.4 |
| Central Wellington | 410,000 | -9.3 | 5.1 |
| Eastern Wellington | 560,000 | 9.8 | 17.9 |
| Western Wellington | 550,000 | -4.3 | -11.4 |
| Southern Wellington | 497,500 | 7.2 | -10.1 |
| Pukerua Bay/Tawa | 411,685 | 14.0 | 3.1 |
| Nelson | 360,725 | -3.9 | 4.3 |
| Christchurch | 407,250 | -5.3 | 5.8 |
| West Coast | 230,000 | 27.8 | 17.9 |
| Timaru | 297,500 | 4.8 | 10.8 |
| Queenstown | 595,000 | -7.8 | 13.3 |
| Dunedin | 269,500 | 3.7 | -3.8 |
| Invercargill | 197,000 | 15.0 | 4.9 |
13 Comments
Get yer head around that lot - that'll help ya make a financial decision
DOWN NATIONAL median selling price in July was $416,000, down 2.6%
UP NATIONAL median selling price in July up 8.1% on July last year.
UP No of homes sold, 5893 sales in July, up 2.3% on the number of sales in July (thats a typo)
DOWN Number of homes sold down 13% on July last year.
DOWN Selling prices in July were down compared to June in most parts of the country
UP Price gains in July in Auckland (REGION?), Taranaki, Otago and Southland bucked the trend
UP Auckland City Council area median price increased from $655,750 in June to $692,000 in July
UP Median price in the Auckland REGION has increased by 10.5% over the last year
DOWN no of homes sold in the Auckland REGION declined to 2240 in July, down 3.8% on June 2014
DOWN no of homes sold in the Auckland REGION declined a whopping 18.7% compared with July last year
Sales in July below $400,000 fell 21.8%.
Sales between June 2013 and June 2014 below $400,000 fell 17.3%
I'm no mathematician, but won't removing the bottom end of the market push up the median considerably?
I think the market is actually doing a lot worse than the numbers we're given suggest....
As I posted on the NBR site (using my maiden name, Wakey Wakey), the economics clearly no longer make sense to buy in Ak. Barfoot data shows rental yields starting with a 2% in Auckland. So that basically means 2% net yield achieveable (when you factor in voids, mgt fees, maintenance, house insurance etc). So for an investor, you are going to need around 70% deposit to service your 6% mortgage interest.
Don't expect rents to rise anytime soon either (Chch has a real housing shortage hence their rents are rising 11% yoy; Auckland was +3.8% LTM, but this website indicated rents actually FELL in July).
Now we need to highlight that Ak prices have risen +6.3% p.a. for the past 5 years on average (Aug-09 $450k to Jul-14 $610k), and acknowledge that this was in an environment where mortgage interest rates fell from 7.2% to 4.9% before starting to rise this year.
So let's present an investment case for property investors. Let's say that the market in Ak can squeeze out 4% annual price growth for the next 5 years on average (2/3 of what was achieved in the past 5 years, recognising a different interest rate cycle and a higher starting point). For an investor, your total return including capital gains will be 5.7%. In fact, this is all capital gain because your rental yield only just services your mortgage borrowings.
Hey guess what? You can today get 5.75% interest on a 5 year term deposit at ANZ or Kiwibank. No risk of prices going down there...
And for those who argue lack of capital gains tax on property, I am still betting that the IRD wakes up and realises that anyone buying a house on a 2% net yield with 6% debt finance cannot possibly be buying with the intention of holding for income...
Mortgage interest rates will be back down to 4.9% to 5.25% before long , rents will rise, net migration into NZ will soar to record levels. Head out to some open homes/auctions anywhere from Remuera/Epsom across to Howick/Pakuranga and you will see around 80% of the visitors are Chinese and interest rates don't seem to be a problem for them as they continue to outbid the Europeans.
You're dreaming right? What do you think interest rates are based on? Term rates are based on foreign money market rates. Floating is priced off the RBNZ.
So as the US continues to tighten (reducing QE, and then raising rates next year), and our NZD falls (commodity cycle over and USD strengthening), what do you think happens to our fixed rates? They will only go up (the current flat spell is an aberration from the overall trend).
Oh, and as the NZD falls, what do you think the RBNZ sees? Low unemployment, economic growth, weaker NZD, all causing higher inflation expectations. How do they respond?
This is all economics 101. NZ property investors are going to get burned in the next few years (there is no magic rental growth coming - there isn't a housing shortage in Auckland, never was and never will be and good luck finding any data proving otherwise).
Your foreign investor point is valid, and hopefully a government will soon realise that allowing non-residents to buy residential housing is plain stupid - it results in:
a) higher NZ debt levels as residents overleverage to compete on price
b) a net loss of economic wealth. Those who claim it is "money coming into NZ" are only looking at one side of the equation; on the other there is the income stream (rent) from the property leaving NZ, the lost taxes (as non-residents avoid tax like crazy), and then the value again eventually leaving the country tax free down track when the proeprty is sold. I bet if you did a comparative NPV on those cashflows you would find for residential property that it is net value DESTRUCTIVE to NZ.
Oh, and by the way I am a raving capitalist in favour of free trade. I just hate poor policy settings based on a flawed, blinkered economic starting point that doesn't take into account externalities and tax leakage.
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