The most recent data released by the Real Estate Institution of New Zealand reveals that both median residential property prices and total sales volumes have been recording record highs in many of the country’s regions lately.
Indeed, the number of record-breaking regions at present is, itself, a record; new highs in sales volumes and property prices are being recorded in more regions of New Zealand than at any one time before.
Over the past year, the supply of residential stock available for purchase in New Zealand has dropped by more than a third. In some regions, the drop has been over 50%. This lack of stock is believed to be the prime driver of price growth and increased activity in the New Zealand market of late.
In April 2016, the median price of a residential property in New Zealand reached $490,000. This is $35,000 higher than the nation al median in April 2015, representing a year-on-year increase of 7.7%. This is, however, down 1% from March. When Auckland is excluded, the national median price in April was $382,000, an increase of $29,000 on the figure for the same month of the previous year.
When compared to the same time in 2015, all regions of New Zealand experienced increased numbers of property sales in April this year. Year-on-year, property sales were up by 18.4% in April this year. When Auckland is excluded, prices in April 2016 were up by 28.8% on April 2015.
Furthermore, after seasonal adjustments, the number of New Zealand homes sold rose by 12.8% between March and April. This reflects the fact that the marked drop in raw-figure property sales which usually occurs between these two months was considerably less pronounced than would normally be expected. Over the past decade, the drop in property sales between March and April has averaged 16.6%, but this year’s sales fell by a comparatively modest 10.1%.
The Real Estate Institution of New Zealand says that the strength of these figures indicates that underlying demand for New Zealand property remains robust. In its report, the institution also states that this data shows that the upward trend in prices, which has previously been observed in some regions, is continuing and spreading further across the country.
Furthermore, the Institution says that anecdotal evidence suggests that there is increased demand from investors. More and more investors outside of Auckland, according to some accounts, are adding real estate to their portfolios in an effort to beat the yields they are receiving from alternative methods of utilising their capital.
Demand for residential property is also being driven, the institution says, by attractive mortgage rates leading first-time buyers to decide that now is the time to move from renting to owning a home.
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