Houses for sale at chronic levels
Median house prices and sales volumes reached new record highs across more regions of New Zealand than ever before, according to the latest figures released by REINZ.
Waikato/Bay of Plenty, Taranaki, Canterbury/Westland and Otago had record median house prices in April, proof of the growing ‘halo effect’ of rising prices around New Zealand. Those areas already experiencing housing shortages and rising prices saw their problem deepen.
Meanwhile, new regions felt the halo effect of investors looking for a secure return on their capital.
The number of dwellings sold in April 2016 rose by 12.8 per cent compared to March, and compared to April 2015, all regions recorded increases in sales volume.
To make matters worse, the availability of properties for sale has fallen by over one third over the past 12 months, with a number of regions seeing declines of more than half. Days to sell, another measure of demand, has also fallen by more than 20 per cent over the past 12 months in nine of the 12 regions.
‘‘For finance approved first home buyers it’s an excellent time to be searching as mortgage interest rates are so low,’’ says Andy Stewart, local spokesperson for REINZ. ‘‘They have to move quickly as so often there are multiple offers after the first open home.
‘‘We’ve seen recent houses with significant improvements sell for as much as 40-50 per cent above Rateable Value,’’ says Andy, ‘‘Remembering that RV is a measure for rates, not current house value.’’ Andy says there are strong numbers arriving at open homes and most homes have an unconditional sales agreement in two to three weeks, with back up offers in place.
Warren McGrath, sales manager at The Professionals, says he knows of one house in the $200,000 to $300,000 range that had 17 offers on it. ‘‘We need 100 houses extra per month at least to meet the current demand for houses because they’re selling quickly and the housing stock needs to be refreshed,’’ confirms Andy.
The national median price was $490,000 for April, an increase of $35,000 on April 2015. Excluding the impact of the Auckland region, the national median price rose $29,000 to $382,000 compared to April 2015.
REINZ Chief Executive Colleen Milne says the April data confirms the continued strength of the real estate market right across New Zealand, driven by a chronic lack of supply.
There were 8568 unconditional residential sales in April, an 18.4 per cent increase on April 2015.
Sales volumes, excluding Auckland, were up 28.8 per cent on April 2015. All regions, apart from Northland, Auckland and Taranaki are showing in excess of 20 per cent annual sales growth. Auckland saw the number of sales increase by 1.7 per cent compared to April 2015, the first annual increase in Auckland’s sales volume since October 2015.
Compared to April 2015, all regions recorded increases in sales volume, with Hawke’s Bay recording the largest increase of 50 per cent, followed by Southland with 49 per cent and Otago with 35 per cent.
The national median house price rose $35,000 to $490,000 from April 2015 to April 2016. Excluding the Auckland region, the national median price rose $29,000 compared to April 2015.
At the same time, the availability of properties for sale has fallen by over one third over the past 12 months.