New zealand property sales surge as winter market warms up

July is usually one of the quietest months in the real estate calendar with new listings and sales at low levels, but the latest data from REINZ shows that there were 6,777 dwelling sales in the month of July, up 14.7% on July last year and 10.5% higher than June. The national median price, though, eased back by $9,000 month-on-month to $385,000, $15,000 below the record median set in March 2013.

Real Estate Institute of New Zealand (REINZ) Chief Executive Helen O’Sullivan says, “It is the most active winter the residential real estate market has seen for a while, with the volume of sales higher than would normally be expected for this time of year. Reports from agents around the country suggest that first home buyers are moving quickly to secure properties ahead of any move by the Reserve Bank to impose lending restrictions on buyers with lower deposits.”

Nine regions recorded increases in sales volume compared to July last year, with Waikato/Bay of Plenty recording an increase of 29.1%, followed by Northland with 23.7% and Central Otago Lakes with 19.7%. 10 regions recorded an increase in sales volume in July compared to June, with Hawkes Bay recording an increase of 40.1%, followed by Manawatu/Wanganui with an increase of 23.3% and Southland with an increase of 22.9%.

The national median house price fell by $9,000 (-2.3%), from $394,000 in June, to $385,000 in July. Compared to July 2012, though, the national median house price is 6.6 per cent higher with all 12 regions recording an increase in the median price.

64.0% of the increase in the national median price compared to July last year occurred in Auckland and 9.9% occurred in Canterbury/Westland. Together these two regions accounted 73.9% of the increase in the median price between July 2012 and July 2013.

Otago recorded a new record median price of $266,778. Compared to July 2012, Nelson/Marlborough recorded the largest increase in median price, up 14.6%, followed by Central Otago Lakes with 13.8%, and Taranaki with 13.2%.

Nationally there were 1,381 dwellings sold by auction in July representing 20.4% of all sales and an increase of 63.3% on the number of dwellings sold by auction in July 2012. Auctions are increasingly favoured as a sales method in certain centres; for the 12 months to July 2013 the total number of sales by auction reached 15,221 or 19.3% of all sales, compared to 9,319 or 13.5% of all sales for the 12 months to July 2012.

"As far as buyers are concerned the normal winter slow down hasn’t happened this year,” adds O’Sullivan, “with volumes up strongly on July last year despite school holidays occurring in the middle of month. The increase in new listings in the month contributed to buyer activity which coupled with the easing in prices suggests that the main constraint is very much one of supply. Stock levels across almost all regions are now particularly tight.”

“The issue of housing availability remains a key for Auckland and Canterbury, but this is also now being seen in other parts of the country.”