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17 Oct 2014

House Prices Flatten Out

House prices in New Zealand remained flat in September, with listings down for the month and sales volumes only managing to lift slightly.  According to the Real Estate Institute of New Zealand (REINZ), the national median house price was unchanged at $420,000 for September, in yet another example of easing market conditions.

According to separate figures from state-owned Quotable Value (QV), residential property values increased 6.4 percent over the year and just 1.1 percent over the quarter.  QV have the average property price sitting at $481,497, with September results bringing the lowest annual growth for 15 months.  While the market is still 16.2 percent above the previous market peak of late 2007, price increases have eased significantly over the last few months.  According to REINZ, while property prices were up 10 percent for the year back in April, this has eased to just 5 percent in September.

“The New Zealand index is showing an increase in residential property values but the rate of growth continues to slow,” said Andrea Rush, QV’s national spokesperson, adding “Auckland, Christchurch and Dunedin saw home values increase, while Tauranga remained flat over the past three months. Wellington values continued the downward trend of recent months and Hamilton values were also slightly down over the past three months."

A total of 5,911 dwellings were sold in September, up 7.8 percent from August but down 12 percent from September last year.  While 10 regions recorded an increase in sales volumes in September, sales have been down on a yearly basis for 11 months in a row.  Otago led the way in terms of sales, with volumes up 25.4 percent.  Northland volumes were up 19.1 percent, with Hawkes Bay up 14.6 percent, Auckland up 7.3 percent, Wellington up 12.5 percent, and Christchurch up 4.3 percent.

Listings were also down for the month, in another example of easing market conditions.  According to REINZ chief executive Helen O'Sullivan, "A key theme reported by agents across the country is a lack of new listings...  There has been some pick up in listings in line with the start of spring, albeit not at the usual levels for this time of year."  Unusually, listings are even low in the busy Auckland market, where even historically high prices are not enough to tempt vendors into the market.

Time to sell figures followed a similar pattern to other market indicators, with conditions slowing when viewed on a year-by-year basis.  "(Nationally) dwellings took three days fewer to sell in September 2014 compared to August 2014 at 35 days. Compared to September 2013, the median number of days to sell was four days longer. Just one region saw an improvement in the number of days to sell between September 2013 and September 2014, with Southland recording an improvement of one day. Auckland saw its number of days to sell ease by two days," said REINZ in the report.