Chilly winter days can't stop the
property market from heating up
By: Candi Hindocha, June 2019
Median prices, inventory and regional development spurs winter market momentum.
While some of us may be cosied up next to the fire with no immediate plans to brave the cold, property buyers have been building momentum, closing deals on homes across the country as winter sweeps in.
New data from the Real Estate Institute of New Zealand (REINZ) reveals that in May 2019, the month-on-month number of properties sold increased by 20.1 per cent to 7,263; the highest number of properties sold within a single month since the start of the year.
Median house prices across the country dipped a modest 0.3 per cent in May 2019, to $578,000. Despite this fall, year-on-year median house prices are up 3.2 per cent from $560,000.
As market conditions start to build momentum, now is the time for potential buyers and sellers to assess their options and consider if it’s time to make their property dreams a reality.
We’ve broken down the latest market data, so here’s everything you need to know from the latest REINZ report.
Now is the time for potential buyers and sellers to assess their options
Regional growth stays strong
It’s good news for those living a quieter life outside of major cities, with strong property values seen across most regional areas. Median prices have increased annually in 11 out of 16 regions.
In particular, strong growth has been recorded in Southland (+16.7 per cent), Manawatu/ Wanganui (+14.4 per cent), Hawke’s Bay (+9.3 per cent) and Otago (+8.2 per cent).
“Gisborne was the strongest of all the regions in May, with a 54.4 per cent annual increase in the median house price. We haven’t seen price rises on this scale for a number of years now, showing just how strong regional growth is in parts of New Zealand,” Bindi Norwell, Chief Executive at REINZ.
Across the country, housing inventory increased by more than five per cent, with more than 1,418 more properties available in the market compared to 12 months ago.
This month’s data marks the third annual increase in inventory levels in seven months. The data identified eight regions with the biggest annual increase in inventory levels. The regions with the largest percentage growth are:
- Marlborough: +24.7 per cent from 271 to 338
- Wellington: +18.3 per cent from 1,052 to 1,244
- Northland: 15.0 per cent from 1,332 to 1,532
- Waikato: +14.9 per cent from 1,743 to 2,002
Auckland’s market remains uncertain
Auckland’s measurements against a range of market indicators suggest its downward trend continues.
Between May 2018 and May 2019, the number of properties sold in the city fell a significant 21.8 per cent. However, it’s possible that the local market is coming out the other side of this downturn, as the data reveals month-on-month volume of property sales increased by 13 per cent to May 2019.
REINZ suggests the likely causes of such significant decline of sold properties in the year, includes the foreign buyer ban and investors failing to add to their property portfolios with the ongoing changes in legislation.
It’s important to always shop with your head as well as your heart
What does this all mean?
By having the latest and most accurate information on the property market, you can make informed decisions when it comes to purchasing a property, everything from locations and hotspots to availability and pricing.
Whether you’re looking to upsize, downsize, take your first step onto the property ladder or bolster your investment portfolio, it’s important to always shop with your head as well as your heart when looking for your next home.
As well as looking for the right price and location, there are a number of other things to keep in mind. It’s important to step back and look for practical local services which will drive value in the long term. Look at transport links, both road and public transport access, childcare and schooling options for the area.
For more tips on buying a property, click here.
If you are thinking about buying or selling a property, your mortgage adviser can help you understand your financial position.
For more information, download the REINZ Monthly Property Report.
The opinions expressed in this article are the opinions of the author(s) and not necessarily those of Resimac. The above is general commentary only and is not advice tailored to any individual’s financial situation. We recommend seeking advice from a mortgage or finance professional before implementing changes relating to your finances.