Un­cer­tainty dogs hous­ing mar­ket: ASB

The Press - - Business - CATHER­INE HAR­RIS

Weakly pos­i­tive house prices in Oc­to­ber are be­ing put down to un­cer­tainty over the form­ing of the new Gov­ern­ment.

Me­dian house prices in Oc­to­ber only nudged up a sea­son­ally ad­justed 1.2 per cent com­pared with the pre­vi­ous month, ac­cord­ing to new fig­ures from the Real Es­tate In­sti­tute of New Zealand (REINZ).

How­ever, on an an­nual ba­sis the fig­ures were stronger, with only Auck­land and Nel­son on the de­cline.

The na­tional me­dian was now $530,000, up 3.9 per cent.

ASB econ­o­mist Kim Mundy said the weaker re­sults were not sur­pris­ing, given the elec­tion un­cer­tainty last month.

‘‘On­go­ing soft sales ac­tiv­ity is tak­ing some of the heat out of the mar­ket and weighing on price growth,’’ she said.

‘‘We ex­pect sales ac­tiv­ity and price growth to re­main sub­dued into 2018, given un­cer­tainty around the im­pact of the new hous­ing poli­cies.’’

REINZ said that, ex­clud­ing Auck­land, the coun­try was do­ing well, hit­ting a record price of

$440,000. Prices were up 8.5 per cent on the same time last year.

In Auck­land, how­ever, prices were clearly off last year’s heady heights, down 3.2 per cent to

$850,000 in the year to Oc­to­ber – al­though they perked up a lit­tle on Septem­ber.

REINZ chief ex­ec­u­tive Bindi Nor­well said Auck­land’s de­crease was ‘‘pre­dom­i­nantly the re­sult of a large num­ber of apart­ments be­ing sold in the old Auck­land city area which had brought down the price of the en­tire re­gion’’.

The big­ger pic­ture was that prices were still in­creas­ing, al­beit at a slower rate in some re­gions.

‘‘Waikato is now the sixth re­gion in the coun­try to have ex­ceeded the half-a-mil­lion-dol­lar mark at least once – some­thing that a few months ago we pre­dicted would hap­pen shortly,’’ Nor­well said.

Record prices were recorded in Waikato (up 9.9 per cent to

$500,000), Manawatu/Wan­ganui (up 11.5 per cent to $290,000), Canterbury (up 4.7 per cent to

$450,000), and Otago (up 14.4 per cent to $412,000).

Nel­son was the only re­gion other than Auck­land to ex­pe­ri­ence a fall in the an­nual price, down 6.8 per cent to $447,500 – the big­gest drop since April 2012.

Na­tion­ally, spring came late to the mar­ket, ev­i­denced by the num­ber of sales, which con­tin­ued to fall. Sales were down 16 per cent year-on-year to 5689, and vol­umes ex­clud­ing Auck­land fell 14 per cent, while sales in Auck­land dropped 21 per cent.

Nor­well said Oc­to­ber had seen some im­prove­ment, with half the re­gions across the coun­try en­joy­ing a pick-up in ac­tiv­ity.

She wel­comed the Re­serve Bank’s com­ments last week that it would make a de­ci­sion later this month about re­view­ing the re­moval of loan-to-value ra­tio (LVR) re­stric­tions, which have made mort­gages harder to get.

‘‘This data is ev­i­dence that the LVR re­stric­tions have done their job of slow­ing the mar­ket, which is why REINZ has re­peat­edly called for LVRs to be re­viewed for first­time buy­ers.’’

There were big falls in sales in Manawatu/Wan­ganui, down 24 per cent on last Oc­to­ber, while in North­land and Bay of Plenty vol­umes were down by 21 per cent.

Sales were also markedly down on the West Coast, where they fell by al­most a third, al­though prices in the re­gion have jumped al­most 24 per cent in the last year.


House prices in Auck­land were down 3.2 per cent to $850,000 in the year to Oc­to­ber.

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