Aussie housing market turmoil has not infected NZ
The real estate woes affecting Australia have not flowed across the Tasman, with OneRoof/Valocity figures showing continued stability in the New Zealand housing market.
The median sales price in New Zealand hit $530,000 in the period leading up to the Christmas holidays - up 2.9 percent on the year before.
First home buyers remained the largest grouping of new mortgage registrations, accounting for 28.8 percent of new mortgage registrations.
Although market activity was quieter over the holiday period, the smaller pool of buyers and housing stock available did not have any negative impact on prices.
OneRoof editor Owen Vaughan said that whilst the figures suggest that buyers are less active during December and January, the fact that sales prices are holding indicates that the major factors determining prices are constrained supply, strong demand and historically low interest rates.
Smaller urban centres experienced the biggest growth in median sales price, with Manawatu/Whanganui leading the pack - up 20.3 percent on the previous year to $320,000.
Vaughan said: "The figures continued to show the capacity for growth in the regional centres, as they play catch up with the larger metros."
However, prices in the country's two biggest housing markets - Auckland and Christchurch - continued to plateau. Auckland's median sale price was down 5.5 percent on the previous year, to $825,000, while Christchurch's median price of $438,000 was marginally up on the same period a year ago.
Also showing marginal growth were Tauranga (up 1.4 percent to $635,000) and Hamilton (up 1.1 percent to $542,000).
Prices in Wellington continued to climb steadily (up 9.2 percent to $630,000), driven by tight supply in the city's market, as did prices in Hawke's Bay (up 7.8 percent), Gisborne (up 8.5 percent) and Dunedin (up 11.8 percent), although growth in these markets seems to be mostly fuelled by their attractive price points.
Vaughan said Auckland's property market had barely shifted in the last 12 months. "For many suburbs in the city, where they are now is where they were 12 months ago - give or take a percentage point or two," he said.
The Auckland suburbs that showed the most growth in the last 12 months were Piha (up 31.3 percent); Great Barrier Island (up 21.6 percent); Dairy Flat (up 21 percent); and Albany Heights (up 18.9 percent).
"Of note is the drop in the percentage of properties that sold for less than $750,000 - shrinking to 32.5 percent of all sales for the period," Vaughan said.
The OneRoof/Valocity figures show that for each property type in the city - apartments, houses and lifestyle property - prices either stalled or slipped in value. The median sales price for Auckland apartments now sits at $636,500 (up slightly on the year before) while the median price for houses has dropped from $938,000 12 months ago to $880,000. The median sales price for lifestyle properties is $1.35 million, down from $1.45 million the year before.
Vaughan said: "Although there is weakness in the main urban centres, it is not comparable to the turmoil in the Australian market.
"The factors at play across the Tasman are particular to Australia - such as oversupply and difficulties in the lending market."
Valocity director of valuation innovation James Wilson said the drivers supporting value growth in New Zealand were still evident, "namely a shortage of good quality housing stock on the market and demand fuelled by an historically low interest rate environment”.
“Whilst it's still too early to assess the impact of the recently loosened LVR restrictions, we would expect this to benefit certain buyer types, namely first-home buyers and investors who may now be able to secure a mortgage with a lower deposit."
He added: "With the housing market awaiting the final recommendations of the tax working group, implementation of healthy homes legislation changes and the ‘ring fencing’ of losses from investment properties, there is still evidence of a ‘wait and see’ approach among many buyer groups."