House price rises defy predictions

The national rate of house price growth is now about half what it was at the end of 2016 – although some regions are still hitting record prices.

The latest statistics from the Real Estate Institute of New Zealand (REINZ) show the national median sale price rose 5.8 per cent in December, compared with the same time the year before.

A year earlier, the annual rate of growth was 11 per cent.

Auckland’s median lifted just 1.8 per cent over the year, compared with a rate of 9.1 per cent in December 2016.

Outside Auckland, New Zealand’s national median rose 6.6 per cent, with record medians in Waikato, up 11.7 per cent year on year to $525,000; Bay of Plenty, up 20.4 per cent to $598,000; and Wellington, up 4.7 per cent to $560,000.

Marlborough, the West Coast and Canterbury had prices drop over the year.

REINZ chief executive Bindi Norwell said price rises had defied commentators’ predictions. She said some pundits were adamant 12 or 13 months ago that prices would fall through 2017.

‘‘While the increase will be welcome news to those looking to sell their property, for those first-home buyers this will not have been the Christmas present they were hoping for,’’ Norwell said.

‘‘Although there is some hope as the rate of price increases has decreased significantly compared to previous years – meaning that, if the trend continues, there is more of a chance that those saving for a house deposit can keep up with increasing property prices.’’

Simon Martin, managing director of Harcourts Tauranga, said the record price in his region was artificially inflated.

‘‘What we are seeing in Tauranga is the lowest-price properties volume of sales has dropped considerably,’’ he said.

Martin said lower-priced properties had been taken off the market because tighter loan-tovalue ratio (LVR) restrictions reduced demand.

Nelson was the only region to experience an increase year on year, with 76 sales compared with 71 sales in December 2016.

Gisborne, Northland, Southland and West Coast had the biggest volume drops.

Between December 2016 and December 2017, the number of homes sold fell in every price bracket, except for the $2 million to $2.99m category which increased by 4.3 per cent.

‘‘December represented a continuation of the theme we have seen throughout 2017, whereby the number of properties sold across New Zealand decreased every month when compared with the same month in 2016,’’ Norwell said.

‘‘On a positive note, there were a number of areas that saw an increase in the number of properties sold.’’

The Rangitikei District had a 90.9 per cent volume increase yearon-year, while the Buller District saw a 50 per cent volume increase.

In December, 14 per cent of properties sold were at auction, down from 18 per cent a year earlier. The bulk of those were in Auckland.