Property market recovery strong in New Zealand, but not boom conditions, say experts

Property market recovery strong in New Zealand

Residential property sales increased in almost every region in New Zealand last month but prices fell, the latest data from the Real Estate Institute of New Zealand (REINZ) show.

Sales in July increased by 19.9% compared with the same time last year but were down 3.7% compared with June.REINZ said that this means that on a seasonally adjusted basis the level of sales in July was about even with June, indicating that the change is in line with the seasonal pattern expected at this time of the year.

The national median house price eased by $11,000 to $361,000, after reaching a new record high of $372,000 in June. The national median house price is up 4.6% compared to July last year, with Auckland maintaining the $500,000 record median for the third month in a row.

Almost all regions recorded increases in sales volume compared to July last year, with Taranaki recording an increase of 62.7%, followed by Auckland with 28.2% and Manawatu/Wanganui with 23.6%. Only Southland recorded a fall in sales volume, down 5% compared to July last year.

July is traditionally a slower month than June and this expected pattern was evident in most regions. However four regions recorded increases in sales compared with June, with Taranaki recording a 31.6% over June followed by an 8.5% increase for Manawatu/Wanganui, 4.5% for Hawkes Bay and a 1.8% increase for Wellington. Auckland recorded a 4.9% fall in sales in July compared to June and Canterbury/Westland recorded a 6.4% fall in sales.

In July, Otago recorded the highest lift in prices for the month with an increase of 6%, followed by Canterbury/Westland with 3.1%, and Hawkes Bay with 1.7%. Compared to July 2011, Northland recorded the highest lift in prices with an increase of 8.5%, followed by Otago with 7.7% and Auckland with 7.5%.

The REINZ Stratified House Price Index, which adjusts for some of the variations in mix that can impact on the median price, is 5.2% higher than July 2011 and is now just below the record high set in June. The House Price Indices for Auckland and Christchurch have set new record highs in July.

‘Buyer interest in Auckland and Christchurch remains the engine of the New Zealand residential real estate market with Auckland maintaining its record median price of $500,000 for the third month in a row and Christchurch hitting its record median price of $335,000 for the third time since November,’ said REINZ chief executive Helen O’Sullivan.

‘In the Auckland real estate market it seems that winter has been cancelled with strong demand right across the city, although the inability of the median price to push on indicates that buyers are still cautious about price,’ she explained.

‘We are still seeing recovery rather than boom conditions when we compare the number of transactions in July 2012 with earlier years such as July 2003 when over 10,000 transactions were recorded. Buyer caution is also evident in the easing of the national median price this month and the slightly slower pace of transactions in July compared with June,’ she added.

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