1 Comment 1 Commentby Susan Edmunds
REINZ chief executive Colleen Milne
The Real Estate Institute has released its August statistics, which show there were 7766 sales in the month, up 41.7% from August 2014 but down 4.4% compared to July.
The national median price was $465,000 for August, an increase of $45,000 or 10.7% on August 2014 and steady compared to July.
Excluding the impact of the Auckland region, the national median price rose $8,500 to $348,500 compared to August 2014 but fell $3,500 (1%) compared to July.
REINZ chief executive Colleen Milne said that activity right across New Zealand continued to be very strong through August, with wintry conditions apparently no deterrent to sales being concluded.
"A rise in the number of new listings matched by the number of sales, showing that with more properties available for sale buyers have emerged to take up the additional supply. However, most regions still face a shortage of listings going into spring.”
She said the presence of Auckland buyers in other regions was becoming more noticeable. There had been a surge in Dunedin and strong interest in Waikato and Bay of Plenty.
"REINZ members report the pending Reserve Bank loan-to-value restrictions in Auckland are driving some of this demand, as are low (and falling) interest rates.
"While there may be some stability coming into prices in the Auckland market, there is no shortage of demand from either first-home buyers or investors across the region.”
From November, investors will have to have 30% equity to buy in Auckland.
New Zealand Property Investors Federation executive officer Andrew King said investors had already started looking at properties outside Auckland, before the new lending rules were revealed.
He said rents had not kept pace with house price rises in Auckland and yields had dropped to the level where they were no longer attractive to investors.
“That’s one of the things that will stop a cycle, prices can’t go up forever but it just doesn’t make sense. It’s already coming to that point for investors.”
He said private home buyers would have a bigger effect in the market overall than investors.
The problem with things such as the new loan-to-value rules was that by the time they were mooted, discussed and finally implemented, the problem was already gone - dealt with by natural functions of the property market's cycle, he said.
King said there was a risk the rules would amplify any downside that was already becoming apparent in the market. “When policy analysts are the ones doing the changes it influences the market and they can get it wrong.”
There were 1916 dwellings sold by auction nationally in August, representing 24.7% of all sales and an increase of 985 (+106%) on the number for August 2014.
Almost 11% of properties sold for more than $1 million.
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