National house prices drop, Auckland market easing

KEY POINTS:

• REINZ data on December residential sales throughout New Zealand has just been released.

New Zealand's national median house sale price dropped $4000 last month and Auckland prices are not rising as fast as they were.

Real Estate Institute data showed the national median was $516,000, down on the record $520,000 high in November.

In Auckland, the median price rose $70,000 or 9 per cent to $840,000 compared to December 2015. The QV House Price Index also released recently showed Auckland value rises which had exceeded 24 per cent in the 2015 year only rose 12.2 per cent last year.

REINZ said seasonally adjusted sales volumes in the Auckland region fell 2 per cent compared to November.

"Sales volumes in the region fell 16 per cent compared to December 2015 with volumes down 11 per cent in Manukau and Waitakere, down 14 per cent in North Shore and 16 per cent in Rodney. Compared to November sales fell 22 per cent with volume down 13 per cent in North Shore, 16 per cent in Waitakere and Rodney, and down 18 per cent in Manukau," REINZ said.

The number of days to sell fell by a day compared to November, from 34 days in November to 33 days last month.

Bindi Norwell, REINZ chief executive, said Auckland was being driven by a combination of factors.

"In Auckland, the long-term median price trend has been consistently rising, despite a slight easing compared to November 2016.

"The combination of fundamental factors, such as strong underlying population growth and a lack of supply in the market to meet Auckland's growing population, suggests that we may be unlikely to see much change to the upward trend in prices unless these fundamentals change," she said.

Five of the 12 regions showed new record median sale prices: Northland, Hawke's Bay, Wellington, Otago, and Southland

Tauranga's median house sale price hit $600,000 in December, up a whopping $130,000 on the same month a year earlier, and up $10,000 on November's average sale price.

REINZ figures showed 121 homes were sold in Tauranga in December, compared with 163 the previous month and 208 in December 2015.

The number of national sales in December 2016 was 6533, a seasonally adjusted basis decline of less than 1 per cent, in line with expectations for this time of year.

ASB economist Kim Mundy said sales in December were 10.7 per cent below December 2015 levels, but sales activity in pockets of New Zealand remain more upbeat, including a 20 per cent month-on-month seasonally-adjusted increase in Wellington and a 10.5 per cent seasonally-adjusted lift in Southland.

"The latest round of investor-focused LVR restrictions appear to have weighed on market activity.

"We expect house price growth to be muted over 2017 but robust demand and limited supply will continue to provide a floor to house prices."

ASB said the REINZ data have no implications for the bank's OCR view and it continued to expect the Reserve Bank of New Zealand to remain on hold for the foreseeable future.

Watch: Making sense of housing data