Slowing conditions in Auckland are having a negative impact on the New Zealand property market, with prices also dropping in other parts of the country. According to the Real Estate Institute of New Zealand (REINZ), the national median house price dropped to $448,000 in January, down from the peak of $484,650 in September 2015 and $465,000 in December 2015. With sales volumes also falling substantially and supply levels on the rise, the market may level out even more over the next few months.
The over-heated Auckland property market appears to be running out of steam, with the median Auckland selling price dropping by 6.5 percent last month. According to REINZ, the median selling price of Auckland homes fell from $770,000 in December to $720,000 in January. While January's median price was still up 9.1 percent compared to January last year, some experts are predicting further price drops in coming months. There was also a big drop in sales volumes, with 1526 Auckland homes sold in January, down 13.5 percent on an annual basis.
The biggest price declines were recorded in the boundaries of former Auckland City, where prices have dropped 8.9 percent and sales volume has dropped 13.6 percent on an annual basis. The median selling price dropped from $867,000 in December to $790,000 in January, a massive slide of $77,000. Manukau also recorded a 7.9 percent price decline, from $760,000 in December to $700,000 in January. Prices dropped in Waitakere from $717,500 to $685,000 over the same time period, with North Shore prices dropping from $910,000 to $870,000.
Auckland is not the only market on the way down, with prices also dropping considerably in other parts of the country. Prices have even been dropping in cities like Hamilton and Tauranga, locations that were attracting investors who wanted to escape the pressures of the Auckland market. In Hamilton, the median price dropped from $449,500 in December to $388,000 in January, with Tauranga prices dropping from $470,000 to $440,000, a drop of 13.7 percent and 6.4 percent respectively.
In the Wellington region, the median house price dropped from $436,000 in December to $394,000 in January, a decline of 9.6 percent. Other cities to record declines in January included Whangarei down 3.1 percent, Napier down 4.3 percent, Hastings down 2 percent, Palmerston North down 5.3 percent, Whanganui down 11.5 percent, New Plymouth down 1.2 percent, Nelson down 1.2 percent, Timaru down 6.2 percent, and Dunedin down 2.9 percent. Prices in Christchurch were unchanged at $440,000.
According to the latest ANZ Property Focus report, sales volumes also slowed in the last quarter of 2015, down 3 percent nationwide from the recent September peak. While Auckland sales volumes rose a seasonally adjusted 14 percent in December, they were still 19 percent below September levels and 13.5 percent down on an annual basis. Slowing conditions across the country are being attributed to new tax and LVR measures, with a 21 percent rise in year-on-year building consents over 2015 also helping to tackle supply shortages in Auckland.