What a year!

November was a huge month across New Zealand with the Real Estate Institute reporting more than 8000 sales of residential property. That figure is 8.5 per cent higher than November last year and 2.7 per cent higher than October's figure.

The institute says the national median price was $459,500 in November, an increase of $3750 on November 2014. However, if you strip Auckland from the figure, the national median price falls to $375,000.

Auckland's median price is $765,000 (October $748,250).

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Colleen Milne, the institute's CEO says the Auckland market continues to be challenged by a lack of supply, which is one of the reasons we saw a modest drop in sales during November.

During the month 2514 properties sold across the region, in October the figure was 2546, and in November last year it was 2947.

Capital gains tax is now applied to non-owner-occupiers who sell their properties within two years of purchase, and foreign buyers need a local bank account and IRD tax number. And while loan to value ratio (LVR) limits on buyers with low deposits were loosened outside Auckland, investors buying in the super city require a 30 per cent deposit - this has put some landlords on the back foot.

Interest rates

On December 10, as widely predicted - and forecast both here and in my weekly Property Podcast - the Reserve Bank lowered the official cash rate to 2.5 per cent.
The rate is now back to where it was in 2009, when the GFC was biting hard. Reserve Bank Governor Graeme Wheeler must be worried about the low rate of inflation because one doesn't need rates this low to support house buyers.

Inflation is currently sitting at 0.4 per cent, the target set by the government is between 1 and 3 per cent. But if the cut helps us avoid a recession then I'm all for it. Will the OCR drop to 2 per cent during 2016 (matching Australia)? That's the big question, and I'm prepared to stick my neck out and say we could see further cuts by June.

As for Auckland's housing ... There are still more buyers than sellers, and first-time home buyers in the city are still not being fully catered for. And if you are looking to buy in the regions, my 2 cents is to get in while you can.

Next year

Expect the property market to slow right down as everyone takes a much needed break. But come mid January it'll liven up again, and I expect the Auckland market to be running red hot again by February.

The next edition of Herald Homes is out on January 2, but you can get your property fix by listening to my Property podcast on iHeartRadio (download the app).

From the whole Herald Homes team, I'd like to wish you a happy Christmas, and a merry New Year.