Last month sales of residential property in New Zealand increased by 7.5%, their highest level for the month of May since 2007, the latest data from the Real Estate Institute of New Zealand shows. The data also shows that the national median price increased $1,500 compared to April and remains just $8,000 below the record median set in March 2013.
Helen O’Sullivan, chief executive of REINZ, said that price levels in Auckland and Canterbury are continuing to have a major impact on the national picture. Auckland recorded the largest increase in median price compared with May last year, and Canterbury the third largest increase in median price. Together both regions accounted for 82% of the $23,000 increase in the national median between May 2013 and May 2012. But price gains in other locations have been modest.
‘There are too few houses coming to market in the Auckland region creating an imbalance between supply and demand and driving up house prices at both the regional and national level,’ said O’Sullivan. ‘The number of residential properties available for sale is falling back to levels last seen when house prices fell in 2008/2009. As we know the level of new builds is well below trend making little impact on the available stock of residential properties for sale,’ she added.
Quote from PropertyCommunity.com : “A lack of supply is pushing up the prices of homes in New Zealand with the mean asking prices rising to record levels in some regions.”
Since sales volumes started to rise from their global financial crisis lows at the start of 2011, the annual increase in sales numbers in Auckland has been just over 20%. However, the number of listings in Auckland has increased at a little over 3% per annum since the number of listings stopped falling in July 2011. Adding in new builds via the number of building consents issued only increased the supply by 4% per annum since the low of July 2011.
‘We would normally expect the number of listings to increase more rapidly coming out of a downturn, but as yet, this does not appear to be happening. While buyers are actively seeking properties, it appears that existing owners are not being motivated to sell by the increase in prices that have occurred across the Auckland region,’ explained O’Sullivan. ‘REINZ is seeing evidence of listings shortages right across the country, with only a handful of regions reporting sufficient supply of properties for sale. With the winter months now upon us there is unlikely to be any easing of the listings shortage until spring,’ she added.
REINZ data shows there were 7,714 unconditional residential sales in May, an increase of 7.5% compared with the same time last year and an increase of 8.6% compared to April 2013. Nine regions recorded increases in sales volume compared to May last year, with Northland recording an increase of 23.3%, followed by Waikato/Bay of Plenty with 15.1% and Otago with 12.2%. Some 11 regions recorded an increase in sales volume in May compared to April, with Hawkes Bay recording an increase of 23.2%, followed by Southland with 17.5% and Waikato/Bay of Plenty with an increase of 11.9%.
The national median house price increased by $1,500, or 0.4%, from $390,500 in April to $392,000 in May. Compared to May 2012, the national median house price increased by $23,000 or 6.2%, with 11 of the 12 regions recording an increase in the median price. Some 82% of the increase in the national median price compared to May last year occurred in Auckland and Canterbury/Westland. Three regions recorded new record medians in May with Auckland posting a new record of $565,000, Canterbury/Westland a new record of $360,000 and Nelson/Marlborough posting a new record of $353,625.
Compared to May 2012 Auckland recorded the largest increase in median price, up 13%, followed by Central Otago Lakes with 11.5%, and Canterbury/Westland with 7.5%. Manawatu/Wanganui recorded the only fall, down 0.2%.