There was a big lift in the volume of residential property sales and their median prices in March, with several regions including Auckland, Waikato/Bay of Plenty and Canterbury/Otago setting new median price records, according to the latest figures from the Real Estate Institute of New Zealand (REINZ).
There were 8504 residential properties sold in March, up 35% compared to February but still down 11% compared to March last year.
The National median sales price hit a new record of $546,000, up 10% compared to February and up 10.3% compared to March last year.
New median price records were also set in Northland, Auckland, Waikato/Bay of Plenty, Hawke's Bay, Manawatu, Taranaki, Canterbury/Westland and Otago.
However much, of the upward movement in prices was likely due to a change in the composition of the properties being sold, with more higher priced properties selling and fewer lower value ones, which could move the median needle.
This month the REINZ has launched a new House Price Index (HPI) which has been designed in conjunction with the Reserve Bank and adjusts for monthly differences in the composition of the homes that are sold.
The HPI showed that nationally, prices in March were up 10% compared to March last year but unchanged from February.
In Auckland, the HPI was up 8.3% compared to March last year but down 0.3% compared to February.
The national figures with Auckland removed showed a gain of 13% compared to March last year, and a gain of 0.6% compared to February.
That suggests that prices in Auckland are flat or declining overall and starting to flatten out around the rest of the country.
The Index showed that prices are down in most parts of Auckland, with the biggest decline occurring Rodney, where the Index declined 1.7% in March compared to February, followed by the North Shore -0.4%, Central Auckland suburbs -0.4%, and Manukau -0.3%.
However the Index posted gains in Waitakere +0.4% (although it was down 0.4% in Waitakere compared to three months earlier), Papakura +1% and Franklin +3%.
The only other major centres where the Index declined in March compared to February were Rotorua -0.6% (-2.1% compared to three months earlier), Christchurch -1.6% and Queenstown -0.3% (-2.9% compared to three months earlier).
Nationally, the biggest gains in the HPI in March compared to February were in Franklin (Auckland's southernmost district) +3%, Napier +3%, Dunedin +2.5% and New Plymouth +2.2%.
"The REINZ HPI takes many aspects of market composition into account, and thus provides more accurate results," REINZ chief executive Bindi Norwell said in the REINZ's March report (se below).
"When applied to the March data, the HPI indicates that the lift in the median price was largely driven by changes in the underlying mix of dwellings sold in March compared to February.
"While the median price went up $51,000 across New Zealand, the HPI was stable month-on-month at 0% change, indicating more sales in higher price brackets than lower ones."
House price inflation has 'cooled substantially'
In a First Impressions newsletter on the REINZ figures,Westpac Acting Chief Economist Michael Gordon said the new HPI gave a clearer picture of the direction of prices.
"The new index confirms our sense that house price inflation has cooled substantially in recent months," he said.
"In particular, prices in Auckland have been effectively flat since August.
"Previous hotspots such as Hamilton and Tauranga have also slowed.
However prices are still rising at a moderate pace in many of the smaller regions."
Click on the link below to read the REINZ's full regional report for March, with details of its new Housing Price Index:
Volumes sold - REINZ
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95 Comments
“Furthermore, the HPI numbers are backed by anecdotal evidence from around the country saying that investors and first home buyers are facing more challenges in securing bank lending compared to this time last year, which is lowering the number of dwellings sold in the lower price bracket. As a result, there are comparatively more sales in higher price brackets, which is lifting the median price. Although this gives the overall impression of rising prices, the underlying data shows that the median is moving more due to differences in the mix of dwellings being sold each month.”
https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2017/Reside…
Canada is not alone in facing a housing-price policy panic. There are housing bubbles expanding all over the global economy.
http://business.financialpost.com/fp-comment/terence-corcoran-from-toro…
Hello AJ : to paraphrase the great economist Philip Fisher ( October 1929 ) " House prices have reached what looks to be a permanently high plateau . "
... he was referring to the exuberant USA stockmarket at the time ...
But , I think the basic concept will hold true for the housing market bubbles popping up around the planet ...
Useless governments appear to be abound.
Still, National have done a stellar job of stuffing up the housing prospects of many younger New Zealanders, and for that we must give credit where credit is due: indeed 'a brighter future together' (together being literal as many young are now crammed in overflowing rental properties).
I mean...this probably warrants an equally silly answer, but ah well, I'll provide a more constructive one.
If you do some reading up on Vancouver you'll find some interesting similarities. Authorities carefully avoiding looking at the origin of funds. Uses of terms like "xenophobia" for years to shout down anyone objecting to a foreign buy-up. Open acknowledgement within the industry that massive capital inflows from China are a major factor, coupled with political insistence that "There's nothing to see here, folks".
Awfully similar stuff, indeed. Likewise, a generation of politicians and voters with vested interest happily selling out the city from under the young and next generations of Canadians...Probably also shouting "You're having too much evil, evil, smashed avocado! Things were hard in my day!" too.
Sure, if you want to live in the darkest wettest city in NZ (see http://www.stuff.co.nz/manawatu-standard/news/88229139/Palmerston-North…).
The lack of sunshine and therefore seratonin could be why Palmy is the suicide capital of NZ.
I like the advice the Doctor in the article gives to those who live in Palmy... "You might want to travel...".
rotorua has higher suicide rate... so does Westcoast and wanganui and many others on a per capita basis; strange myth this one as never seen pn top this list.
and many places have less sunshine hours, palmy was worst of the bigger cities in this one particular year,
That fertile land and vast water is whats makes palmy great food producer; home of FoodHQ, agResearch etc etc.
"The matter is not as simple as this article implies. 60+ years of sun data (using Campbell--Stokes recorders) showed Palmerston North to be significantly sunnier than Dunedin and Invercargill (but not the other major centres). I see no climatological reason why this should change. There is probably an issue with the electronic recordings at the current PN site - most likely an inadequate exposure to sunlight due to the surroundings" - researcher
Also saw in original article they lost data for a number of days for Palmy , that might explain a lot. But hey keep up the Palmy bashing, like the Hamilton bashing, doesn't stop people thriving and economies thriving in these cities. Silicon Valley not known for its sunshine hours..
http://i.stuff.co.nz/manawatu-standard/news/69707991/nz-a-leader-in-bio…
In biotech sense it is.
Some say there is a correlation between high intelligence and suicide:
What do you mean Rick? How do you know the next generation won't be able to afford a house?
Have you considered Auckland is not the whole NZ??? Have you considered this might push skilled workers and more businesses to the regions?
You're just another one of these doomsday predictors who have cried wolf way to many times!
Yeah they are high but who are you to say they are overpriced? That's the price you pay to live and work in a top internationally rated City. Look at any city around that's desirable to live in and the corresponding price of housing. You may say price relative to wages is too high and I agree. We are in a cycle, wages need to catch up in Auckland and you are starting to see that (My personal view not stated as fact).
So you can make predictions about my personality based on my username?? Ill take that as a joke but i wouldn't mind if that were true either!. Moody's never said that housing was overpriced or even that it is inevitable that we are going to see a crash. They just said that we are tracking along the same lines as US, Spain Ireland etc before their housing busts so we are at risk of that happening here. I'm not saying there won't be a bust but we have alot stronger bank regulatory systems in place than the US did in their last bust, more immigration than Ireland did etc. There is risk to everything you do. If you worry about every potential risk all the time you mayaswell not get out of bed in the morning.
On the other hand, as affordability is measured internationally, plenty of sources have noted how overpriced Auckland's houses are. Realistically, houses can only stay out of the reach of local incomes for so long unless they are disconnected from those local incomes through other factors. E.g. Vancouver and capital outflows from China displacing Canadians.
Okay Rick, you go and sit there and twiddle your thumbs complaining about the cost of housing and never achieve anything. That's your prerogative. I don't have any housing investment at all and I probably will never invest in housing as there are better earners out there (Probably not in the last 3 years though!). My views are no more valid than yours. Whos to say in 5 years time prices of housing in Auckland won't be 30% higher than todays prices?
Your arguments don't flow. International measures of affordability ≠ me twiddling my thumbs. Neither have I said anywhere that your view is not valid (feel free to quote an example if you feel I have).
What I have done is point out that Auckland house prices are terribly unaffordable to locals, as considered by globally-accepted measures. No need to consider that an attack on your right to have a view.
I will be okay either way. However, it's not only about you and I. is it? Shouldn't we also be considering the needs of young and upcoming generations of Kiwis? That's what earlier generations did that helped foster such high levels of home ownership as were seen in the 1980s - including multiple earlier government builds.
There were good reasons why houses became affordable for those born at the right time. It's irresponsible to hold no regard for what we leave to next generations, solely for a bit of selfish profit.
(NB. Don't assume the last is a personal attack directed at you. I don't know anything about you.)
this is a great myth that wages will somehow catch up to ensure the bubble doesn't burst. In reality wages are set by market conditions and unlikely to increase, and if they did our export competitiveness would decline. What we are seeing is house prices in Auckland being beyond the reach of police, teachers and other skilled workers who could legitimately expect to own their own house. What we have also seen is minimal increase in rentals. What we can deduce is that for even small increases in rentals people change their living arrangements (kids staying at home, students flat sharing). We also see industry and professions moving from Auckland. The massive growth in auckland house prices has not been brought about by immigration, because if it was rentals would be higher. It has been brought about by speculators gambling on further house price increases. Now house prices increases have stopped more people will start to exit the massive ponzi scheme that is Auckland house investment.
this is a great myth that wages will somehow catch up to ensure the bubble doesn't burst. In reality wages are set by market conditions and unlikely to increase, and if they did our export competitiveness would decline. What we are seeing is house prices in Auckland being beyond the reach of police, teachers and other skilled workers who could legitimately expect to own their own house. What we have also seen is minimal increase in rentals. What we can deduce is that for even small increases in rentals people change their living arrangements (kids staying at home, students flat sharing). We also see industry and professions moving from Auckland. The massive growth in auckland house prices has not been brought about by immigration, because if it was rentals would be higher. It has been brought about by speculators gambling on further house price increases. Now house prices increases have stopped more people will start to exit the massive ponzi scheme that is Auckland house investment.
"Top internationally rated city". That is hilarious. Auckland may score on some arbitrary scale but let's be honest it is a relatively small city, with low paying jobs, at the arse end of the world. It has a crushing infrastructure shortage (with the debt to match) and the main reason it has high prices is ineffective planning and workforce management. The only thing Auckland has going for it is that it is not in China or India and is therefore better than the cities in those countries. I love New Zealand but let's not pretend we compete with the big boys on most metrics, the main advantage we have is that there aren't that many people living here.
"the main advantage we have is that there aren't that many people living here"
The Nats are fixing that for us and forcing wages down with low quality mass immigration, what's not to like?
Auckland 2100: https://www.theguardian.com/global-development/gallery/2017/mar/02/plas…
>You're just another one of these doomsday predictors who have cried wolf way to many times!
Well, that's quite wrong...I haven't cried wolf at all.
But let's consider your post. Your best suggestion is for young Kiwis to move out of Auckland and cede it to...who, foreign investors?
What a great legacy for our politicians to leave, the abandonment of Auckland because global investors want it instead.
I thought it was proven that it wasn't foreign buyers buying up all of Auckland was it not? Did your neighbor tell you that it was foreign buyers? Sure they are contributing to high prices but i think its a supply demand thing and immigration is causing prices to soar. If you know whats going to happen in the future whats this weekends lotto numbers?
Seconded.
Having planted industry spruikers and trolls detracts from the quality of the comments section. Whether someone is "pro" property or a so called "doomster" isn't the issue - all commenters should have to put together a reasonable argument and not spam aimlessly.
Please implement the down vote and ban trolls accordingly.
Of course you can bgballz, but like anything in life - if your actions/success/happiness come at the expense of the success/happiness of others, they are going to resent you for it.
It appears the greedy want to be greedy and have others adore them for it. Not sure what reality you live in, but that's not how human interactions work....
DGZ and ZS (and perhaps you) remind me of an obese child who has eaten too much cake and gloat about how great it is, then get upset when others tell you you're fat.
Not at all, my dear fellow! My personal feelings don't enter into it, and I'm quite happy to see DGZ's comments on principle, even if I may not agree with them. I am simply suggesting that we might have the ability to downvote, as you would also be most welcome to do to any comment I or anyone else might make. Let the market decide!
ANYONE happy with Auckland house prices has a short sighted and vested interest. A properly vibrant economy needs real growth from jobs & output and hard working people deserve to have clean, warm and safe housing (rent or buy).
No one can sanely argue a house to income ratio > 10 is good.
Manawatu record at sub 300k from memory of report?
Bargain buying there. Just stay away from Wanganui, and avoid any hype around feilding which sux and has serious issues with the Oroua river which will make feildings already very high rates go even higher... New builds on $200k sections in Feilding wont do much to supply side - 800k+ houses will be built on these
Interesting note in the report: "The level of inventory in Auckland are rising quickly with 47% increase in inventory over the past month, offering buyers more choice.”
And in a while not only offering more choice but lower prices! That's how ballooning inventory works...
Less houses sold, median up does not a rebound make.
I suspect people are holding off paying over $600,000 for some of the less desirable Auckland suburbs and thus skewing the median upwards.
If anyone is looking for a laugh at the expense of the NZ Herald check out the facebook group:
"My parents gave me 200k and all I have to show for it is a two bedroom unit"
https://www.facebook.com/162540460936142/photos/a.162584877598367.10737…
Told who, what?
Did you read the article?
Says sales compared to March last year are down.
"There were 8504 residential properties sold in March ... still down 11% compared to March last year."
Who is back, exactly? They're all gone...
Sorry to burst your bubble (pun)
I know a one year old who bought a house - now in the terrible two's and has some advice..... :-)
Seriously - a contract with a 15 year old may not be enforceable
https://www.consumerprotection.govt.nz/consumer-law-and-your-rights/con…
The story also marginalised that he bought it 20 years ago. It was a pretty grim time and there wasn't a boom so the story is not just irrelevant but they acknowledged that they're pushing shit uphill.
Banks are continuing to tighten lending. The focus has shifted to retention of existing customers rather than rather accumulation of new mortgages. Expect a painful experience if you're buying and you need more than a $120 per fortnight buffer in case of interest rate increases.
Yellen said that the FED will raise rates 3-4 times in 2017. She has been extremely cautious about any announcements and waited a long time to start tightening. I think there is every reason to believe that US interest rates will rise this year.
This will impact NZ.
Chinese inflation will spread globally also effecting NZ.
Inflation is contagious. Some commentators even predict stagflation.
But the longer interest rates stay low, the greater the damage later. That can't be denied. Unless you think pensions can be materialised out of the current interest rates? Or that asset bubbles continue forever? If you think any bubble can grow forever, please show me a single example.
For all those nasty speculators, there's still an easy 80k+ to be made per house purchase in palmy over next 2 years as median goes from 320k to 400k (the new limit for all the FHB grants, kiwisaver etc etc). All while tenant pays the mortage payments. Late cycle action in full thrust as equity rich auckland and welly speculators ride the wave of price ripples
Let's see mate. We'll discuss tomorrow.
Palmy being 85k population and within 1 mill ppl has infrastructure far greater than small towns.
They have flood gates that open to drown opiki and west side of Palmy (feilding might be in trouble).
Bet you a dozen Palmy comes through better than feilding and a number of small towns that lack population and infrastructure to keep them safe.
Dear lord - every time I see a comment from 'Simon' I think to myself.. god damn, it's gonna be about palmerston north again... a comment that no one actually cares about.
Also, if you think there is an "easy" 80k to be made in the next 2 years, mortgage yourself up to the hills and take full advantage. No one here is going to stop you... although I doubt anyone else is going be on the next flight down...
Yes - Palmy has a lot going for it.
I reckon that right now, the smart money is on a balanced property portfolio - and one that includes some solid provincial cities.
Palmy is well-placed for the future. It has Massey University, a regional hospital, a central locality (and an easy drive to Wgtn), strong agricultural hub, an airport with flights to Australia and numerous satellite towns.
Further you can buy a reasonable 3brm family home for $350,000 - but that won't last for much longer I fear.
Buy into Palmy now and you'll do alright I'd wager. "Hokowhitu" is the suburb to go for: it has the best quality housing and, being close to Massey, has high rental accommodation demand as well.
Thanks, spot on, Palmy is best buying town in NZ from investors pov, the others miss my post on valuing assets on NPV to explain global boom in equities and house prices at start of trend? Know what a discount rate is and when lowered it's effect on asset prices from an investors point of view? Try stop moaning about being poor and learn how money works
Totalling wrong DellBoy. Been promoting it for atleast 4 years now (not 18 months). Please pay attention. A few grumpy at losing the bet that pn can handle rain better than most due to state of art flood gates? Maybe when you become Dellman your comments might become more mature.
Been around for ages, similar to QV index; basically it normalizes data to GVs; so if a bunch of cheap houses sold (investor activity increase) the median would drop; but the index looks at gv of houses sold also; so if all sold 20% over GV, when previous year they were selling at gv, then index would be up 20% yoy dispite an apparent drop if looking just at medians.
In essence it takes into account the types and mix of houses sold, not just looking at a bunch of sale prices like the median does
See I'm not convinced that Auckland's top end house prices will remain high, not if you look at the latest auction results where most of the expensive area properties are selling just below or a little over the million mark even in highly desirable areas such as Devonport.
And this is also being reflected in the recent figures: The Index showed that prices are down in most parts of Auckland, with the biggest decline occurring Rodney, where the Index declined 1.7% in March compared to February, followed by the North Shore -0.4%, Central Auckland suburbs -0.4%, and Manukau -0.3%.
However the Index posted gains in Waitakere +0.4% (although it was down 0.4% in Waitakere compared to three months earlier), Papakura +1% and Franklin +3%.
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