REINZ says median house price was NZ$390,500 in April, down from NZ$400,000 record in March; Sales volumes strong

House prices dropped from their record levels in the last month, with the median falling to NZ$390,500 in April, down from the record NZ$400,000 achieved in March.

The Auckland median price dropped to NZ$555,000 from NZ$562,000 in March.

However, conditions nationally remained extremely buoyant, with very strong sales volumes.

The national median in April was 7% higher than for the same month last year. Auckland's median was 13.3% higher than a year ago.

There were 7104 houses sold in April 2013, an increase of 25% on April last year, and the best April turnover for six years. While the April figures were 12.6% down on the stellar March figures, on a seasonally-adjusted basis they were actually up 0.8%, indicating that sales were slightly stronger than would normally be expected for this time of the year.

The REINZ Stratified Housing Price Index, which adjusts for some of the variations in mix that can impact on the median price, is 9.8% higher than April 2012 and increased 0.8% compared with March. It is the highest rate of increase since late 2007. The index figure is the one watched most closely by economists and the Reserve Bank.

The Auckland Stratified Housing Price Index is up 14.1% compared with April 2012, while the Christchurch Stratified Housing Price Index is up 12.7%. The Wellington Stratified Housing Price Index hit a new record high in April, as did the Other South Island Stratified Housing Price Index

The chief executive of the Real Estate Institute of New Zealand (REINZ), Helen O’Sullivan, said April was notable for the surge in prices and sales of mid-level homes in many parts of the country, which was reflected in a new high for the REINZ Stratified Price Index and records for the index in Wellington and Other South Island districts.

"Several regions appear to be benefiting from the tail-wind generated by the strength of house prices in Auckland and Christchurch," she said.

All but one region recorded increases in sales volume compared with April last year. Manawatu/Wanganui recorded an increase of 36.5%, followed by Taranaki with 36.2% and Nelson/Marlborough with 34.2%. Four regions recorded an increase in sales volume in April compared to March, with Central Otago Lakes recording an increase of 11.3%, followed by Manawatu/Wanganui with 2.0% and Southland with an increase of 0.7%.

Taranaki recorded the largest annual increase in median price, up 15.9%, followed by Auckland's 13.3%, and Canterbury/Westland with 10.0%. Central Otago Lakes recorded the largest fall, down 10.1%, followed by Hawkes Bay, down 6.4% and Nelson/Marlborough, down 2.2%.

O'Sullivan said overall price levels in Auckland and Canterbury are continuing to have a major impact on the national picture, with Auckland recording the second largest increase in median price compared with April last year, and Canterbury the third largest increase in median price. Together, Auckland and Canterbury accounted for 92% of the increase in the national median price over the past 12 months.

The pause particularly in Auckland house price rises, backing up the figures from Barfoot & Thompson released at the start of the month, will give some comfort both to the Reserve Bank and the Government.

RBNZ deputy governor Grant Spencer recently warned about the impact of rising prices, particularly in Auckland.

And just last Friday there was an announced accord between the Government and the Auckland Council aimed at producing 39,000 extra houses for Auckland in the next three years and taking pressure off the shortage of supply in the country's largest city. The targets set by the accord are, however, historically much higher than Auckland has achieved.

However, today's REINZ figures overall still paint a picture of a very buoyant house market and further future price rises seem inevitable.

O'Sullivan said sales volumes in the Auckland region increased by 30% compared with April 2012, displaying strength right across the region. Compared with March, sales volumes fell by over 16%, with North Shore, Rodney and Outer Auckland seeing the largest falls in sales and Manukau City seeing the smallest fall.

Compared with April 2012 the median price increased by $65,000 (+13.3%), with prices increasing the most in Waitakere City (16.5%) and North Shore City (14.7%). Auckland city's median was up 10.4%.

For the whole of Auckland, the median price eased by $7,000 (-1.2%) compared with March, with the volatile Auckland City prices seeing a fall of 7.8% and North Shore falling 2.1%.

"The Auckland market continues to see strong demand for properties, particularly in the urban area, with any increase in listings quickly being absorbed by sales. Investors appear to be more active in the market than 12 months ago, although the number of first home buyers remains steady," O'Sullivan said.