NZ house sales slow in November as LVR restrictions seemingly bite, REINZ says
New Zealand's house sale numbers unexpected fell in November from a year earlier as the Reserve Bank's restrictions on low equity lending appear to have snuffled out some buyers seeking cheaper properties.
The number of houses sold in November fell 6.6 percent to 6,691 from the same month a year earlier, and were up 2.7 percent from October, lagging the usual pace of increase, according to Real Estate Institute of New Zealand figures. That's the second month since the Reserve Bank imposed limits on how much banks can lend on housing with just a fifth or less down as a deposit, and carried on the trend of slowing sales from October.
"As the average increase between October and November over the last ten years has been more than 10 percent, this indicates a further softening in sales volumes," chief executive Helen O'Sullivan said in a statement. "The restrictions on high LVR lending may well be a driver of the softer sales figures, with sales below $400,000 falling almost 20 percent compared to November last year."
Houses under $400,000 accounted for about 45 percent of sales in the month.
The central bank will welcome the early signs its policy is biting into demand as it looks to cool heating markets in Auckland and Christchurch which have been hit with a shortage of supply without having to resort to hiking interest rates.
Governor Graeme Wheeler today firmed up his stance on hiking rates next year, saying the official cash rate is expected to increase 2.25 percentage points over the coming two-and-a-quarter years.
The bank today said it expects house price inflation to persist for slightly longer than it previously thought as inbound net migration and low interest rates stoke demand.
The national median sale price rose 4.3 percent to $425,000, a new record, and was up 11 percent from a year earlier, with Auckland and Christchurch accounting for about 85 percent of that gain. The stratified housing price index, which smoothes out peaks and troughs, rose 1.2 percent in November, and was up 9.6 percent from a year earlier.
Auckland prices rose 6.5 percent in November from October to $620,000 and were up 15 percent from a year earlier. The number of houses sold rose 4.2 percent 2,794 in November, and were down 4.3 percent from a year earlier.
Canterbury/Westland sale prices rose 2.6 percent in November to $389,750 and were up 13 percent from a year earlier. Sales volumes were down 0.2 percent to 888 and fell 1.4 percent from a year earlier.
The number of days to sell was unchanged from October at 31 days, two days faster than November 2012.