Uncertainty impacts house market

A plunge in the number of houses listed for sale last year could be due in part to increased regulation around property investment, real estate agents say.

In its annual review of the market, the Real Estate Institute (REINZ) says listings tumbled 8.1 per cent on the previous year, and that had a knock-on effect on the number of house sales.

House sales were 1.2 per cent lower than the year before, totalling 77,470. Some 106,819 properties were listed on the market, 9374 fewer than the year before.

Higher prices and the housing shortage were likely reasons for the fall in sales, but Bindi Norwell, REINZ’s chief executive, said more legislation for investors was probably another factor. Investors must now hold onto their property for five years rather than two if they want to avoid paying tax. Overseas buyers also face greater hurdles. But 2019 also saw the Government weighing up – and abandoning – the idea of a more widespread Capital Gains Tax.

This made a difference to the psyche of buyers and sellers, Norwell said. ‘‘Significant regulatory changes, including the proposed Capital Gains Tax ... made a significant impact on sales last year as investors considered their options as they waited for an outcome.’’

However, for sellers, 2019 was a cracker year, with 14 out of 16 regions around the country logging record prices. The median New Zealand house price ended the year at $590,000, and $500,000 outside Auckland.

Percentage-wise, house prices rose 6.3 per cent, compared to 4.7 per cent in 2018.

Nowell said the lift was due to a combination of the housing shortage, an increased demand for quality properties and fewer listings, low interest rates and the continued movement of Aucklanders

into the regions.

Regions with the biggest rates of price growth were Gisborne, up 21.6 per cent to $389,000; Southland, up 20.4 per cent to $301,000; and the Manawatu¯ -Whanganui region, up 19.4 per cent to $370,000.

The only region to see prices fall was the West Coast, although it eased only slightly, down 1.3 per cent to $197,500. Prices in the Auckland market stayed steady at $850,000 but started picking up at the end of 2019.

The ANZ has predicted house prices could rise up to 8 per cent this year.

The median New Zealand house price ended the year at $590,000