The housing market bounced up in February with the volumes of homes sold running ahead of February last year and prices also improving versus January, according to the Real Estate Institute of New Zealand.
The REINZ recorded 6373 residential property sales in February, up 1.2% compared to February last year, while the national median price was $530,000, compared to $520,000 in January.
That puts it the national median price up by 3.9% compared to February last year.
Homes also became slightly easier to sell, with the median days needed to make a sale dropping from 46 in January to 44 in February.
The latest figures will bring some welcome relief for the real estate industry, which suffered lacklustre sales volumes and soft prices for much of last year.
In Auckland, 1600 homes were sold in February, slightly up from the 1568 that were sold in February last year. But that's still well below February in 2012 to 2015 when more than 2000 homes were sold each month, and below February 2016 when 1819 homes were sold.
Around the country, the volumes of properties sold in February was up compared to February last year in Auckland, Bay of Plenty, Hawke's Bay, Manawatu/Whanganui, Wellington, Nelson, Marlborough, West Coast, and Southland, and down compared to February last year in Northland, Waikato, Gisborne, Taranaki, Tasman, Canterbury and Otago.
Median prices were up compared to January in all regions except Taranaki where they dropped from $365,000 to $350,000, Tasman which was down from $550,000 to $530,000 and Otago where they fell from $464,000 to $400,000.
However although median prices remain ahead of where they were in February last , they remain below the record highs that were set last year in all regions except Hawke's Bay, which hit a new record high of $444,000 in February.
The graphs below chart the monthly median price movements and volumes sold for all regions of the country.
Median price - REINZ
Select chart tabs
Volumes sold - REINZ
Select chart tabs
88 Comments
Let's not get ahead of ourselves because house prices have risen from January. Just as I said the same about the January prices being down on the December prices. It happens every year. To have a meaningful comparison we need to compare prices with the same month a year ago.
For example, March prices will be up on Feb prices... it doesn't mean much, we need to compare yoy
@yvil ............ nonsense , quite simply since December house prices have actually surged resulting in Auckland house prices going up a staggerring 8,4% in the year to February .
That unrealised gain in the case of our home , equates to about twice our annual household income before tax .............. its ridiculous and unsustainable .
Compound that over a 30 year mortgage and see where it ends up .
Who is the Government going to blame ?
With immigration actually INCREASING since they took office , its a case of WTF are they doing to curb this lunacy ?
Where do you get your 8.4% figure from?
the only 8,4% figure i see on the REINZ press release is median price ex auckland.. Auckland median price yoy is +3.7%.
In another comment you mention YTD instead of yoy.. but that also wrong. the chart on this page shows median is slightly down since dec 17.
I think most are swing voters
9 Years of one Government doing a good job of changing NZ into something unrecognisable from when I was kid, may make me seem like a left voter. But with house prices as they are in the stratosphere, unlimited immigration, traffic jams up the wazoo, and homelessness at a record high, its hard to stay enamoured with a National government I had the misfortune of voting in.
@ KBKIWI ......... thank you for pointing this out .
The surge in Auckland house prices is a year to date figure of 8,4% ......thats twice the cost of borrowed money in capital growth .............. tax free .
There is no better investment on the planet right now
Its a no -brainer to buy property , and as long as immigration hits monthly records , it will will remain a no-brainer
Year to date.. for February. getting a little ahead of yourself aren't you.
Look at the REINZ HPI.. auckland up 1.1% yoy. , nz ex-auckland up 6.9% So it looks like in auckland the top end of the market is still selling well skewing the raw median, but comparing similar property types the gains are much lower, and slightly below CPI inflation.
But Groen ............ the prices are still beating records ............ it sheer lunacy
Our home is valued at $2,0 million , and an 8,4% increase in value which would be tax free if we sold , would equate to more than our entire household income for the year BEFORE tax
Its sheer lunacy
What would it cost you to buy a section of same size and build exactly what you have Boatman?
If you sold would you be downgrading from e.g. location, size building type etc? Do a like for like analysis and you might find that your valuation increase is completely justified given the high costs that are involved with anything housing.
I think for the most part when we complain about expensive houses, we are complaining about expensive land. It's not the cost of the house itself that causes Auckland to be twice as expensive as most of the rest of the country. It's the land cost that needs to be dealt with.
And why is developed land so expensive mfd? Government should be looking at themselvs here. Central Government for the gst there's 60k on 400k section and council for the massive contribution fees not to mention add 20k water connection charges. So all up 150k give or take
Just booked a hamilton council drainage inspection. Earliest date is 6 April 2018, that's over Three Weeks from now for a half hour appointment! Imagine calling 111 and being told we will be there next week :)
The government has absolutely no chance of meeting or beating their ambitious house construction targets imo
I know, but it seems the standoff intensifies. This cannot continue forever though. Are we heading for 100+ days average to sell? The banks have "manufactured" the last breath in this market, by increasing LVR lending volume above 80%, and fighting for market share with reduced interest rates. At some point these initiatives will also hit a sealing, and there will be no additional capacity to lend, as all potential FHB's will be tapped out. Unless overseas money flows into this market, prices will be on shaky ground.
The bounce has been made possible by the banks. Thank you, banks for keeping the interest rates low for a little longer. Please don’t increase them in the near future.., our beautiful and unique driver of property demand.
PitU,
Thank you for sharing that great video.
Even with falling interest rates, we are already seeing credit restrictions, particularly for property investors. APRA regulations implemented in March 2017, have made the large 4 Australian owned NZ banks tighten credit by applying tighter loan criteria when assessing borrower applications. This is particularly acute for interest only loans which are coming to the end of the interest only period and going onto P&I terms resulting in 30-40% increase in payments. Many part time property investors are finding out the hard way that lending conditions can change and now have changed and that it is now very difficult to refinance into another interest only loan.
The supply of credit has fallen due to tightening lending criteria by the banks. There may be demand for credit by property investors however they are unable to get credit due to the tightening of loan criteria.
Regarding supply and demand for property inventory in Auckland. Previously in Auckland, up to 40% of property purchases were being purchased by property investors & traders. With credit supply drying up, many of these buyers are no longer active buyers in the Auckland property market. In fact, with their interest only loans turning into P&I loans, they are now becoming potential property sellers and supply property inventory to the market. So property investors who were previously a large proportion of demand for property inventory (due to the previous easy availability of credit) are now becoming suppliers of property inventory in Auckland. This is a key dynamic not discussed and frequently missed by many property market commentators when discussing property market demand and supply, possibly as it is very unpredictable.
If interest rates rise, or there is a unexpected external shock such as the GFC (which results in an economic slowdown and job losses), then there is potential for more highly leveraged property owners to come under financial pressure and the supply of property inventory to the market increase, while the demand for property inventory falls further due to potential further tightening of credit, or inability to obtain credit.
Yeah I’ve seen that one. If you accept that accomodation demand is a material but not key driver of house prices our rental market makes sense ie increases in rentals but nowhere near reflecting price increases. It’s all about credit.....which I don’t find at all comforting
Still the 2nd worse Feb for sales numbers in Auckland since 2011
quote from NZ Herald "Auckland saw the median days to sell a property increase by six days to 49 - the highest number of days it's taken to sell a property in Auckland for nine years."
Trade me listings for Auckland over 12200
Forget about the medians, it means nothing when properties are not selling
Auckland RE market is in the doldrums, no doubt about it
2015 and 2016 weren't exactly normal though were they? That was like the hottest time in the market. It seems unreasonable to think that a market should remain scorching hot forever. Perhaps things are just normal now. 1600 houses sold in Auckland in February is still a fair number.
If you understand statistics, you know that if you torture your data enough, you can get any result you want. Since last few months, success rates at auctions have been below 50%, then why it appears that prices are going up? Houses in the upper end (more than 1.3 mil) are selling well and that is what driving the average and median prices, but that cannot go on forever. Anyways, we always pay attention to what we want to hear. good luck folks!
Totally agree FG,data is manipulated to suit the presenters bias.
It would be good to see it broken down into bands, $500-600k,600-700 etc.
I'll bet that lower end is not doing well at all.
The true indicator is sentiment,nobody is crawling over each other to buy,there is not much competition for a $700k renter in Clendon,no FOMO...RE's look a little sad standing in there open home feeling lonely...
All the houses that had long time ‘for sale’ signs on the North Shore now have ‘sold’ signs. Clearly someone is buying the houses. So tragically, the doom and gloomers are correct. Prices are still rising and if you’re a tenant, Zach/DGZ, ex-expat et al, are rubbing their hands with glee... they’re about to raise your rent and squeeze home heating, or some other ‘nonessential’ out of you.
It is after all your fault for not buying 20 years ago. So it’s your fault if your family does without, so your landlord can lead an ‘enviable’ lifestyle...
Yep I'm on the North Shore and there is plenty for sale but they are selling.
The graph is STILL going in only one direction, the upward trend continues.
Sure its crazy but when will it end ? Seriously we could be looking back in 10 years going wow the house prices were cheap in 2018, they had it easy back then !
I'm not seeing the same trend you are. From REINZ data, for North Shore, Feb 2016 median was 940k (Feb 18 991k). Feb 16 double the sales volume of Feb 18. Slim increase over 2 year period. Still very low volumes (historically) I reckon prices haven't gone up much over 2-3 years. Who knows what will happen in the future, new listings low and seems to be a few vendors delisting properties that don't sell.
Exactly, just like we looked bach in 2003 at house prices in 1994 and they looked so cheap back then , the same in 2013 .... No matter how long you look back, any Auckland property Graph shows the same trend - and that is going up in the long run.
I have noticed that sold signs are almost everywhere on the North Shore , from few examples I see they are selling close to current CV. ... North Shore is steady as she goes which would be expected after 60-70% appreciation in the last few years.
Are you expecting massive wage inflation (sounds good to me) or are you expecting mortgage interest rates to keep dropping from what are already historic lows to enable that to happen?
How are Auckland workers going to service a mortgage on a median ~2 million dollar property in 10 years if house prices keep going up and neither of those happen?
Its not sustainable.. it will have to normalise eventually. Just a matter of waiting to see what kicks off the crash.. or maybe the gains stop and it flatlines for 6-8 years while incomes catch up.
For the record, I own one property, my home. I never want to be a landlord or a tenant or even own a second property like a Bach. I’m interested in the market truth (as I witness it in the Eastern Bays bubble) but really couldnt care less outside of that. Tomorrow I’m having coffee with an agent who has sold 7 houses in the last two weeks. I’ll specifically grill him on who is buying and who is selling. The majority of his sales are $2 million plus.
In Auckland, March will be interesting because in order for there to be a positive median yoy % increase, prices will have to increase by $47,000 or a 5.5% increase between February and March. I suppose this is possible but it seems unlikely to me. I'll have to wait and see.
Auckland is a very large housing market.
Inevitably, some suburbs will show bigger price increases than others.
Houses in the inner-city suburbs are likely to show the greatest increases in value - because the convenience factor will be the major drawcard as Auckland expands further.
TTP
Greg, you state "that puts the national median price up by 3.9% compared to February last year"
The REINZ report states:
"The median house price for New Zealand rose 6.9% in February to $530,000 up from $496,000 in February 2017 according to the latest data from the Real Estate Institute of New Zealand (REINZ)"
Maybe a typo?
“We have a good number of new stock coming
to the market daily, especially in Christchurch
and it includes properties in all price ranges.
Investors are looking to sell lower end stock that
will not meet the new standard and more people
appear to be selling rental investments when the
tenants move out. Therefore, the first home buyer
section of the market is performing reasonably
well. With more for them to choose from, they are
taking their time shopping around. Days on the
market for properties has increased, especially
for anything overpriced, even if it’s only slightly
overpriced. Looking ahead the market looks good
until Easter.”Jim Davis
REINZ Regional Director
Christchurch City Median Sales Prices
Feb 2017 - $452,000
Feb 2018 - $453,000
https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2018/Reside…
WTF...I just went out and signed up for some property based on the experts in here,then this headline pops up in here:
https://www.interest.co.nz/property/92616/harcourts-average-selling-pri…
CHCh prices very stable and represent amazing value.
Gordon not dropping as you keep saying.
Your expert advice shows that you know nothing about property when you say that wise investors should have bought in Dunedin and not Chch!
Amazingly you must have put the buyers off as the median dropped by 64k in one month being a drop of 14% in a single month!
Great tipping Gordon, you know your stuff!!!
TM2,why don't you pop in and give your opinion on the other article in here today:
https://www.interest.co.nz/property/92616/harcourts-average-selling-pri…
Vman, what is there to comment On?
Auctions results are not a true reflection of the real estate market!
You can do anything with stats depending on what sells.
Personally love buying at Auctions as you can often get absolute bargains as vendors are motivated to sell on the day.
Opportunities are around when the market is stable and vendors are more motivated.
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