New zealand property prices hit record high as auckland cools

Photo: Craigsydnz

Property prices in New Zealand have hit a record high outside of Auckland, as sales rise and supply tightens.

Auckland, not unlike London, has raced ahead of the Pack in recent years, with house prices in the area repeatedly posting record prices. Now, though, the country's regions have overtaken Auckland, as the market adjusts to the lending limits introduced by officials last year. The loan-to-value cap implemented by officials applies to Auckland investment properties, a measure that was designed to curb investment purchases, thereby cooling price growth.

The national median price was $465,000 in December 2015, according to new figures from the Real Estate Institute of New Zealand - an increase of $15,000 or 3.3 per cent on December 2014.

Excluding the impact of the Auckland region, though, the national median price rose $28,000 to $379,000  to reach the fourth record high in a row.

New record median prices were also reached in Waikato/Bay of Plenty, Hawke’s Bay, Wellington, Nelson/Marlborough and Otago.

7,313 sales were recorded across the country in December 2015, up 3.5 per cent year-on-year but down 9.1 per cent from November 2015. Excluding Auckland, the number of sales compared to December 2014 increased by 17.5 per cent, but fell
8.1 per cent compared to November.

REINZ Chief Executive Colleen Milne comments: "Regional markets, particularly Northland, Waikato/Bay of Plenty, Hawkes Bay and Central Otago Lakes are now setting the pace for the New Zealand real estate market, with Auckland, in a relative sense, now in the middle of the Pack. The decline in sales volume in Auckland, while noticeable, is likely transitory as the region gets to grips
with the new LVR rules for investors, although the median price continues to firm."

In the second half of 2015, the regional markets saw supply decline significantly, as  well as the number days the average property takes to sell, both of which have helped to drive up median prices.

"This breadth of the improvement across New Zealand suggests that there is more is at play than just an Auckland ‘halo effect’, although that has contributed in the northern regions," adds Milne.