House prices set new national record, Auckland decline embedded

New Zealand house prices have set a new national price record of $562,000, up 5 per cent or $27,000 annually, driven by strong growth in areas like Tasman, where prices shot up 16.2 per cent to hit $600,000 for the first time.

But Auckland prices continue to fall, down 1.3 per cent from $862,800 to $852,000 in the year to May, with volumes also down.

The Real Estate Institute data showed Northland sale prices up 6.7 per cent, giving a median of $475,000, up from $445,000, and Tasman up 16.2 per cent to $612,000 which REINZ said was the first time since records were kept that prices had gone over $600,000.

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"A year-on-year price increase of $27,000 has seen New Zealand achieve a new record median house price of $562,000, a 5 per cent increase," REINZ said.

Bindi Norwell, REINZ chief executive, said: "The record price for New Zealand of $562,000 continues to highlight the buoyancy of the housing market across the country. Of the 16 regions, 13 saw an annual price increase, five of which were double-digit increases showing that the demand for good property continues unabated. Only three regions saw a year-on-year price decrease – Auckland, Gisborne and Southland.

"The record median price achieved in Tasman has seen the region skip both Wellington and the Bay of Plenty to become the second most expensive region in New Zealand in just a single month, highlighting just how popular the region continues to be – even as we head into winter. It's staggering to think that a region of 51,000 people has more expensive property than a region of nearly 514,000* people."

But Auckland had reached what she called middle ground.

"This suggests that the standoff between buyers wanting a bargain and sellers wanting an unrealistic price is coming to an end," she said.

The number of houses sold in May rose 1.3 per cent, from 7482 to 7578. But the number of properties sold in New Zealand excluding Auckland decreased 0.5 per cent year-on-year to 5247, down from 5271 in May 2017.

The number of houses sold in Auckland increased 5.4 per cent year-on-year, from 2211 in May 2017 to 2331 last month.

Regions with the largest increases in sales year-on-year were:

• Nelson – up 25.3% from 83 sales to 104
• The West Coast – up 20.9% from 43 to 52 – the highest sales count in 6 years
• Gisborne – up 15.8% from 57 to 66
• Hawke's Bay – up 12.5% from 248 to 279 - the highest sales count in 14 months.

"Auctions were used in 12.7 per cent of all sales across the country in May, with 961 properties selling under the hammer. This is down slightly from May 2017, when 13.3 per cent of properties (996) were sold via auction," REINZ's statement said.

"For the fourth month in a row, Gisborne had the highest percentage of auctions across the country with just shy of a third of properties in the region sold under the hammer."

Auckland was second with 21.1 per cent or 492 properties sold at auction in May, down from 24.3 per cent a year ago.

Gareth Kiernan, Infometrics' chief forecaster, said: "The housing market was a mixed bag in May. Although sales volumes were up 1.3% from May 2017, activity dropped on a seasonally adjusted basis to its lowest level since October last year. Price growth was steady at 3.7 per cent per annum, with weakness in Auckland and Canterbury prices continuing to drag on nationwide house price inflation."

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