House Prices Firm, Volumes Down

Kitchen Photo 2Median house prices firmed slightly across New Zealand during February , with regions outpacing the nation’s largest city of Auckland according to the Real Estate Institute of New Zealand.

The national median house price increased to $495,000 in February , up 1% from January and 10% higher over the year.

Outside Auckland the median price rose 7.3% from a year earlier, while in Auckland where prices have skyrocketed recently it was up 6.7%. The number of sales in February was 6253, down 14% from a year earlier.

Record -low interest rates and record high net migration continue to underpin the nation’s hot property market but tighter restrictions for highly -leveraged lending and having an impact , Reinz said in a statement.

Concern about New Zealand’s bubbling housing market have prompted policy makers at the Reserve Bank to introduce a series of curbs on mortgage lending and “we hear anecdotally that the LVRS are having an effect and banks are reducing lending, becoming more selective about who they lend to, what properties they will lend on and the terms” Reinz chief executive Bindi Norwell said.

Two of 12 regions hit a new median house price record. In Northland the median price across the region rose 20%on the year to $421,250 , while in Otago it rose 18% to $317,250.

“The Otago market remains robust with another record median price recorded this month. The demand from investors has reduced, but the slack has very quickly been taken up by local home buyers. First home buyers remains steady” Reinz regional commentator Liz Nidd said.

However, in Auckland the median house price increased 6.7% to $800,000 from February a year earlier but slipped 0.6%versus January , while in Wellington the median price increased 16% to $520,750.

” Auckland is a mixed picture: there is something in the market for buyers and sellers. Compared to the same time last year, median prices have increased, inventory has increased and volumes have decreased”, Ms Norwell said.

Across New Zealand, the total value of residential sales including sections was $4 Billion in February compared to $4.2 Billion a year earlier and 2.7 Billion in January. In the 12 months to February , the total value of residential sales was $58 Billion.

The number of homes that sold for more than $1 million rose by 5% on the year , accounting for 11% of all dwellings sold.

In comparison , the umber of properties sold for under $400,000 fell 26% versus the same month a year earlier.