House sales slump in December but prices still firm
The number of property sales across New Zealand slumped 10 percent in December from a year earlier but prices continued to lift, according to the Real Estate Institute.
A total of 5,903 properties were sold across the country in December, down from 6,567 in December last year. Auckland volumes fell 6.4 percent on the year to 1,693. Nelson was the only one of 16 regions to see an increase year-on-year with 76 sales compared with 71 sales a year earlier.
"December represented a continuation of the theme we have seen throughout 2017, whereby the number of properties sold across New Zealand decreased every month when compared with the same month in 2016," REINZ chief executive Bindi Norwell said in a statement.
New Zealand's overheated housing market — considered a risk to financial stability — has slowed as Reserve Bank restrictions on more highly-leveraged mortgage lending and tighter credit criteria being demanded by banks made it more difficult for borrowers. Housing market sentiment had also been weighed by new government policies to restrict the sale of homes and property to foreign investors.
The median number of days it took to sell a property increased to 32 from 31 in December 2016 while the number of auctions, which is generally an indicator of a heated housing market, represented14 percent of all properties sold, down from 18 percent in the same month a year earlier.
The REINZ house price index lifted 3.8 percent year-on-year in December to 2,655. Excluding Auckland, it was up 6.8 percent on the year. Auckland's house price index increased 0.7 percent versus December 2016. The house price index considers the mix and value of the property sold, not just the sales price. Five regions - Waikato, Bay of Plenty, Tasman/Nelson/ Marlborough/West Coast, Otago and Southland - all reached new highs during December indicating strong value growth in these areas, REINZ said.
"As there appears to be less urgency for buyers to purchase a property, as well as for vendors to sell their property, we've seen sales count drop and the days to sell increase during 2017. However, as vendors have been holding steadfast to their pricing expectations, we've still seen the price of properties going up, which is reflected here in the increased HPI," said Norwell.
The median house sale price lifted 5.8 percent to $550,000 versus a year earlier. Excluding Auckland, the median price rose 6.6 percent to $450,000, while Auckland's median price rose 1.8 percent to $870,000 versus December 2016. Three regions, Waikato, Bay of Plenty and Wellington, saw record prices.
The number of properties available for sale nationally increased by 9.3 percent to 24,610 versus the prior December. Excluding Auckland, the number of properties available for sale increased by 2.1 percent to 16,113.
The number of homes sold fell in every price bracket except for the $2 million-to-$2.99 million category, which increased by 4.3 percent year-on-year. A total of 96 properties were sold in that bracket. The number of dwellings sold for less than $500,000 in December 2017 fell by 18 percent on the year, representing 43.7 percent of all homes sold across the country.