New Zealand property prices hit new record
Property prices in New Zealand have reached a new record without the help of over-heated Auckland, as government cooling measures appear to take effect.
Today’s other House Prices news:
Scottish house prices rise at twice the speed
Property prices in New Zealand have reached a new record, according to the latest data from the Real Estate Institution of New Zealand. The country’s average property value has raced upwards in recent years, mostly thanks to the over-heated Auckland market. October’s peak of $370,000, though, was recorded excluding the area, as the rest of the country saw prices rise 8.4 per cent year-on-year and 1.4 per cent month-on-month.
The pattern is similar to that of the UK’s recovery, where London has rocketed ahead of the rest of the country, only to cool down as the rest of the markets begin to rebound. Indeed, while Auckland’s property prices rose by an average of $107,750 (16.8 per cent) year-on-year, on a monthly basis, the area’s price growth declined 3 per cent (down $22,500).
The figures will come as some relief to New Zealand authorities, who took moves to cool the market earlier this year, amid fears that foreign investment has fuelled rising prices. All buyers must now own a New Zealand IRD and bank account number, while a test has also been introduced for investors who sell within two years.
Economist Tony Alexander of the BNZ told the Herald that the measures sparked "a plethora of anecdotes - and nothing more than anecdotes - of Chinese offshore buyers pulling back from the Auckland market".
7,838 dwellings sold in New Zealand in October 2015 overall, up 18.6 per cent on October 2014 and down 4.1 per cent on the preceding month. Sales volumes excluding Auckland were up 5.5 per cent from the previous month and up 27.5 per cent on October 2014. On a seasonally adjusted basis, Auckland’s sales volumes were down 15.3 per cent compared to September, indicating that sales volumes were noticeably weaker in Auckland than would normally expected for this time of year.
Real Estate Institute of New Zealand (REINZ) Chief Executive Colleen Milne says: “The drop in the number of sales in Auckland in October is the result of a softening of demand over the past few months and the new IRD and bank account rules introduced at the start of October. However, the fundamental supply and demand drivers of the Auckland market remain in place, and the result for October is indicative of the market adjustment phase as it adapts to these new requirements.”
“Elsewhere across the country we are seeing increasing demand and rising prices as buyers of all types emerge to take advantage of low interest rates. It is further evidence of the ‘halo’ effect of Auckland-based buyers searching for value in regional markets. During winter and into early spring, the property markets in a number of regions have been far more active than would normally be expected, thus a slowdown or pause is not surprising following this burst of activity.”
The national property price in New Zealand is now $460,000, up $30,000 (7 per cent) on October 2014 and down 5.1 per cent on September.