New Zealand house prices continue to rise, with the fastest national growth recorded in over a year and the fastest Auckland growth recorded in over a decade. According to figures from state-owned valuer Quotable Value, national property prices rose 9 percent in the year ending May 31, the fastest pace in 15 months. This was a jump from the already healthy 8.3 percent growth recorded in April, as the official cash rate drops and migration soars to record levels.
Much of the strong national growth can be attributed to Auckland, with house values in New Zealand's most populous city rising year-on-year by 14.6 percent in April to 16.1 percent in May, the fastest pace in 11 years. According to the latest figures from Barfoot & Thompson, Auckland reached a new high average price of $822,148 in May, with a median price of $750,000 recorded.
According to Barfoot & Thompson's managing director Peter Thompson, "Buyers are mindful that prices are at an all-time high, but the combination of a sound economy, low mortgage rates and a housing shortage gives them confidence prices are not on the verge of retreating.... Not unexpectedly, measures announced in the May budget have had no impact on market activity last month. If the budget initiatives are to have any influence they are likely to show up in June’s activity."
Sales activity was also high in May, with sales numbers up from April by 14.5 percent. A total of 1225 properties were sold in Auckland during May, up from 1109 in April. "With sales in May at 1225 it was the third month in a row when we sold more than 1000 homes in a month. It was something we never achieved in 2014. We had a major listing drive in April and early May, and through this achieved 1740 new listings in May, our highest number in a May for 8 years." said Mr Thompson.
Despite efforts to cool Auckland's bubbling housing market, low interest rates and record migration continue to increase demand. New Zealand's annual migration has broken records for nine consecutive months now, with a net gain of 56,800 migrants recorded in the year ending April. Roughly half of all new arrivals are heading to Auckland, with high demand and under-supply helping to push prices to record levels.
According to QV national spokeswoman Andrea Rush, "The usual winter downturn does not seem to have dampened demand as high net migration, relatively low interest rates and a constrained housing supply continue to fuel demand in the Auckland market... This demand is also now spreading to provincial centres nearer to Auckland with values up in Tauranga, Hamilton, Cambridge, Pokeno and towns in the Hauraki District." Property values in Hamilton and Tauranga both increased 4.1 percent on an annual basis, with Wellington property values increasing by 2.6 percent and Christchurch values increasing by 3.8 percent.