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First home buyers active over summer break

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Fuseworks Media
Fuseworks Media

The Real Estate Institute of New Zealand (REINZ), the most up-to-date source of nationwide real estate data in New Zealand, announced today that there were 5,048 dwelling sales in January 2016, up 4.3% on January 2015. Excluding Auckland, the number of sales compared to January 2015 increased by 14.5%. On a seasonally adjusted basis total sales volumes increased 9.7% compared to January 2015 and 21.7% excluding Auckland.

The national median price was $448,000 for January, an increase of $22,000 or 5.2% on January 2015, but down 3.7% compared to December. Excluding the impact of the Auckland region, the national median price rose $20,250 to $361,250 compared to January 2015. Activity in the regions continues to show the influence of the halo effect with new record median prices reached in Hawke’s Bay and Taranaki with first home buyers, attracted by low interest rates which has increased their purchasing capacity, becoming more active in these regions.

Real Estate Institute of New Zealand (REINZ) Chief Executive Colleen Milne says, "January is an unusual month for real estate data due to the Christmas/New Year period and the summer holiday break, so comparisons with December are always a bit difficult. January typically has a significant drop in sales volume and a noticeable drop in median prices compared to December. That said, over the past 10 years the average drop in sales volume for January has been close to 20%, while there has been an average 3% drop in the median price nationally.

"Auckland continues to show declining sales numbers, however the reasons are many and varied, including an increasing large group of potential sellers who are unable to find suitable new properties - a reflection of the very tight listings position in Auckland and increasingly tight listings across the rest of the country. The market in Wellington, appears to have taken a pause in January with a decline in sales volume and median sale price."

Sales Volumes

There were 5,048 unconditional residential sales in January, a 4.3% increase on January 2015 and a fall of 31.0% on December. On a seasonally adjusted basis, the number of sales fell 5.1% from December to January, indicating January sales were slightly softer than would normally be expected at this time of year.

Sales volumes excluding Auckland were up 14.5% on January 2015 and up 21.7% on a seasonally adjusted basis. Northland, Waikato/Bay of Plenty, Hawke’s Bay are all showing in excess of 25% annual sales growth.

All regions recorded a decline in sales volumes compared to December, which is typical in January due to Christmas/New Year and the summer holiday break. Compared to January 2015, 10 regions recorded increases in sales volumes, with Hawke’s Bay recording the largest increase of 36%, followed by Northland 31% and Waikato/Bay of Plenty 27%.

Prices

The national median house price rose $22,000 (+5.2%) to $448,000 from January 2015 to January 2016. Compared with December the national median house price fell by $17,000 (-3.7%). Excluding the Auckland region, the national median price rose $20,250 (+5.9%) compared to January 2015. On a seasonally adjusted basis, the national median house price rose 4.9% compared to January 2015 indicating that prices increased slightly slower than would normally be expected at this time of year compared to the historic trend.

Hawke’s Bay and Taranaki both reached new record median prices in January, with Canterbury/Westland hitting the record median price first reached in April 2015. Waikato/Bay of Plenty recorded the largest percentage increase in median price compared to January 2015, at 12.9%, followed by Otago at 12.0% and Hawke’s Bay at 11.8%. Taranaki recorded the largest percentage increase in median price compared to December, with a 6.2% increase, followed by Hawke’s Bay with a 2.1% increase and Canterbury/Westland 0.9% increase.

Auctions

There were 418 dwellings sold by auction nationally in January, representing 8.3% of all sales and a decline of five (-1%) on the number for January 2015. The 20,065 sales by auction in the 12 months to January 2016 represented 22.1% of all dwelling sales, compared to 18.5% (13,848 sales) for the year ending January 2015.

Transactions in Auckland continue to represent the majority of national auction sales, however the dominance of Auckland has declined significantly over the past 12 months, from 78% of all auction sales in January 2015 to 52% in January 2016. In contrast, the number of auction sales in Waikato/Bay of Plenty has increased from 39 (9.2%) in January 2015 to 119 (28.5%) in January 2016, a yearover-year increase of 209%. Over the same period the number of auctions has increased by 200% in Wellington, and by 105% in Central Otago Lakes.

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