November house sales' strongest growth outside Auckland
New Zealand's housing market continued to show signs of life in November, with the number of properties sold up 17.8 percent on the month across the country, although it was down 8.9 percent on the year.
A total of 6,893 properties were sold across the country in November from October, the largest increase between those two months in six years, the Real Estate Institute said. Outside of Auckland, the number of properties sold rose 19.4 percent on the month while in Auckland the number increased 13.9 percent versus October.
All regions, except the West Coast, saw volumes increase versus October. Sales volumes fell 24.2 percent versus October on the West Coast and were down 26.5 percent on the year. The largest increase was in Nelson, where sales volumes jumped 34.7 percent on the month.
Bindi Norwell, Reinz chief executive, noted that November traditionally sees a robust increase but "the change in November compared to last month was stronger than we would have expected based on past data."
New Zealand's overheated housing market - considered a risk to financial stability - has slowed over the past year 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 down by the change in government as Prime Minister Jacinda Ardern looks to implement policy to restrict the sale of homes and property to foreign investors.
However, earlier this month, the Reserve Bank announced plans to dial back the restrictions on the level of new bank lending to owner-occupiers with less than 20 percent deposit and leveraged residential property investors, citing recent moderation in the housing market as a good time to start moving.
"There is no denying that with one of the wettest winters on record and the election, that it has been a difficult few months for the industry. However, last month has provided the industry with a boost in optimism and confidence which has seen the market return to normal November conditions," said Norwell.
The median number of days it took to sell a property increased to 33 from 32 in November 2016, while the number of auctions, which is generally an indicator of a heated housing market, fell 31.3 percent on the year but rose 38.9 percent from October. Auctions now represent 18 percent of all sales nationally.
The REINZ house price index edged up 0.3 percent month-on-month to a fresh record of 2,663. All but three regions (Auckland, Taranaki and Canterbury) reached new highs during November indicating strong value growth across most of the country, Reinz said. The house price index considers the mix and value of the property sold, not just the sales price.
Regarding inventory, the number of properties available for sale nationally increased by 7.6 percent to 27,488 versus November last year. Excluding Auckland, the number of properties for sale was up 0.5 percent to 17,553.
The median house sale price lifted 3.8 percent to $540,000 versus a year earlier and was up 1.9 percent on the month. Excluding Auckland, the median price rose 8.4 percent on the year and 2.3 percent on the month. Auckland's median price rose 0.6 percent to $880,000 versus November 2016 and was up 3.8 percent versus October.
Between November 2016 and November 2017, the number of homes sold fell in every price bracket except for the $2 million to $2.99 million category which increased by 11.8 percent. During November, 142 properties were sold for between $2-$2.99million, up from 127 in November 2016.