More on house prices
Auckland’s property market turned in September, helping drive a national month-on-month rise in home prices of
1.4 per cent, but greater price rises could be on the horizon.
Westpac’s economists are tipping house price growth to accelerate next year, and believe home prices could rise 7 per cent in 2020.
Real Estate Institute of New Zealand (REINZ) figures show the median price paid for an Auckland home in September was $848,000.
Home buyers faced a record national median house price of $597,000 at the end of September, up from $560,000 at the end of September last year. ‘‘September was a strong month price-wise, with record median prices recorded in four regions – Manawatu¯ / Whanganui, Southland, Taranaki and Hawke’s Bay,’’ said REINZ chief executive Bindi Norwell.
Kiwibank senior economist Jeremy Couchman said national monthly sales were the strongest for a September month since 2016.
Dominick Stephens, Westpac chief economist, predicted the coming year would see house prices accelerate. ‘‘We predicted [in May] that the housing market would gradually pick up, and that annual house price inflation would accelerate to 7 per cent over
2020. We predicted that the turnaround would be most noticeable in Christchurch and Auckland, which at the time were the weakest housing markets.’’
That would make it harder for people who needed to save their own deposits, rather than being gifted it by relatives, to get into properties, he predicted.
As prices have risen, the number of sub-$500,000 property sales has plunged. In September this year, 2144 homes sold nationwide for less than $500,000. In September last year, 2337 homes sold for less than $500,000.
By contrast, the number of properties sold for $750,000 or more rose from 1586 to 1840.
Prices rose during the month of September in 13 out of the 16 regions REINZ tracks. Prices fell in the Nelson region, the West Coast of the South Island and Northland.
‘‘Strength was seen in Auckland’s market, a market that has been dragging headline indicators down,’’ said Couchman. ‘‘Nationally, the 5896 sales recorded by REINZ were the strongest for a September month in three years.’’
Not every region saw a rise in home sales. Canterbury, Waikato and Bay of Plenty all saw dips in sales.
‘‘The worm looks to have turned in the Super City,’’ Couchman said.
‘‘Auckland saw the first annual increase in median prices for the region in 11 months,’’ said Norwell.
‘‘This rise was the result of an uplift in the percentage of properties sold between the $750,000-$999,999 mark and the 6.3 per cent rise in median prices in Waitakere City – the only territorial authority in Auckland to see a median price increase during September,’’ she said. ‘‘Whilst the Auckland region saw an increase, it’s too early to call this a trend.’’
As well as more homes selling, the number of days it took properties to sell fell by three days to 37 days.
The market was ‘‘far from running hot’’ however, Couchman said.
Buyers have been enjoying support from falling mortgage rates.
‘‘Business confidence may have disappointed the RBNZ since the August monetary policy statement, but at least the housing market is moving in the expected direction,’’ Couchman said.