In September sales volumes were unusually low across New Zealand, but median house prices increased again in 14 regions. Meanwhile, the Auckland market is stable – and looks set to remain so into the near future.
Property market sprang to life, Wellington’s QVs revealed
Published: November 2018
It has been a late-blooming spring, but the property market is finally emerging from its winter sleep. In this Housing Market Snapshot: REINZ reported a significant lift in sales volumes, the Reserve Bank kept the OCR unchanged at 1.75% (as expected), and Wellington's new rateable values have just been revealed.
As REINZ anticipated, after an unusually quiet September, October saw a 15.5% year-on-year increase in the number of residential properties sold across New Zealand. It’s the highest number in five months, and also the highest number for the month of October in two years.
"We predicted that, with the increase in listings coming to the market, October’s sales would be much stronger than September’s," said REINZ CEO, Bindi Norwell. "With strong sales this month, it’s our belief that, in the current market, New Zealand is taking a different path to what we’re seeing across the Tasman at this point in time."
Norwell also downplayed the impact of the foreign buyer ban, stressing that most of October’s lift in volume was likely due to the spring lift rather than a rush of foreign buyers trying to get in ahead of the ban.
Regional New Zealand continues to deliver strong momentum, with increased sales volumes in 13 out of 16 regions. “But the stand out results belong to the South Island, with the highest volume growth seen in the southern half of the country – particularly in Marlborough which saw a 46.2% increase when compared to the same time last year,” said Norwell
Other top performers were Southland (+32.9% properties sold), Canterbury (+28.7%), and Otago (+23.4%). Auckland’s sales volumes were also up 15.2% year-on-year.
New Zealand set another record median price, which increased by 6.0% year-on-year to $562,000 (+8.9% to $479,250 excluding Auckland).
"The constraint on supply has continued to drive up house prices across much of the country," said Norwell. "Until we seriously address the fundamental housing supply issues, record price increases is something that we’re going to continue to see around the country, particularly as Aucklanders continue to move out of the city for both lifestyle and affordability reasons."
Five regions, in particular, stood out for achieving record median prices:
- Manawatu/Wanganui: +20.2% to $344,000
- Otago: +18.2% to $480,000
- Hawke’s Bay: +17.4% to $464,123
- Taranaki: +8.6% to $380,000
- Canterbury: +3.3% to $465,000
For more information, click here to download REINZ’s Property Report.
- Sales volumes
Wellingtonians can now visit qv.co.nz and check out how much their home is valued at.
The newly-released quotable values show a jump of 44.6% in average house prices across the city, with some traditionally affordable suburbs seeing over-50 per cent increases. And according to QV general manager David Nagel, market conditions may continue to push prices up.
The new rating valuations will come into effect from 1 July 2019. Property owners can object to their valuations by email, by phone or online before 20 December 2018.
As expected, the Reserve Bank of New Zealand has left the official cash rate (OCR) at 1.75%.
Bank Governor Adrian Orr stressed that the OCR would remain unchanged for the next two years, but the possibility of a cut seems less likely. While the previous two statements mentioned that the next OCR move could be ‘up or down’, any explicit reference to a rate cut has now been removed.
Reading between the lines, commentators suggested that this may paint a ‘gloomier’ outlook for the future of the OCR. And the reason why it’s important to pay close attention to the Reserve Bank’s positioning is that – even if there was no movement on the actual rate – OCR predictions can affect the term rates, particular one, two and three-year mortgage rates, and possibly have an influence on longer-term pricing.
See if you qualify. To get a more accurate idea of how much you can borrow with RESIMAC Direct, click here