New Zealand house sales rose 6.6 percent in April, the biggest year-on-year increase in 23 months, as ongoing demand coupled with tighter inventory saw prices increase in 14 of 16 regions. Prices outside of Auckland have risen almost 50 percent in the last two and a half years.
The number of houses sold climbed to 6,368 in April from 5,973 a year earlier, the Real Estate Institute of New Zealand said. Excluding Auckland, the number of properties lifted 8.4 percent on the year to 4,514 while sales in Auckland were up 2.4 percent to 1,854.
"The last time there was an annual increase in the number of properties sold that was this strong, was in May 2016. It’s a pleasing result for the industry that we’ve had three out of four months of 2018 seeing positive year-on-year volume increases suggesting that the market is in a good position," said chief executive Bindi Norwell.
New Zealand's overheated housing market - considered a risk to financial stability - has slowed as Reserve Bank restrictions on more highly-leveraged mortgage lending and tighter credit criteria being demanded by banks made it more difficult for borrowers. Housing market sentiment had also been weighed by new government policies to restrict the sale of homes and property to foreign investors. Recent data, however, points to some life coming back into the market, in particular as supply remains tight.
The house price index - which measures the changing value of property in the market - lifted 3.8 percent to 2,706. Excluding Auckland, the index climbed 6.6 percent. The REINZ HPI showed 11 out of 12 regions experienced an increase over the past 12 months. The only region not to experience an increase was Canterbury, which fell 0.3 percent year-on-year.
The national median sale price rose 1.9 percent to $550,000 from a year earlier, while median prices for Auckland eased by 0.6 percent to $850,000. According to Norwell, the number of properties sold in Auckland for between $250,000 and $750,000 increased while the number of properties sold in the $750,000 and above brackets fell, thereby, bringing the overall median price down in Auckland.
Across the country, however, the bottom end of the market accounted for a smaller proportion of sales in the month, with houses sold for less than $500,000 at 43.1 percent of all sales, down from 44.6 percent a year earlier, while house sales between $500,000 and $749,999 accounted for 28.3 percent of all sales in April, up from 26.9 percent a year earlier. At the top end of the market, houses that sold for more than $1 million fell to 13.8 percent of the market versus 14.2 percent a year earlier.
The national inventory increased 1.1 percent to 26,269, with a 20 percent increase in Nelson, a 9.2 percent expansion in Waikato and an 8.2 percent lift in Canterbury. The Wellington region still has the smallest inventory across the whole country with only eight weeks’ inventory available to those looking to purchase in the area.
The median number of days to sell a property nationally increased by 2 days from 34 days in April 2017 to 36 days in April 2018.