The 2 most striking factors in the Real Estate Institute’s monthly residential statistics, out on Wednesday, are that the national median has continued to rise despite a slide in Auckland, and despite a switch between shares of the 2 middle price brackets.
The gulf between Auckland & ex-Auckland medians is still wide – $410,000, compared to $473,000 a year ago.
When you look at the 4 price brackets the institute uses, you’ll see both the top & bottom shares of the overall market have shrunk, but the middle brackets have swapped places – the share of the $750,000-$1 million bracket dropped about 11% while the share of the bracket below it, $500-750,000, rose 15%.
That conforms to indications in auctionrooms that vendors are having to cut their reserve to attract any interest, and likely cut again to achieve a deal. Auction transactions are generally taking far longer while those negotiations take place.
Median house price in October (October 2016 in brackets):
National: $530,000 ($510,000), up 3.9%
National excluding Auckland: $440,000 ($405,500), up 8.5%
Auckland: $850,000 ($878,500), down 3.2%
The breakdown of sales in price brackets and their share of the market in October 2017 & October 2016 (in brackets):
$1 million-plus: 726 (974), 12.8% (14.4%)
$750-999,999: 773 (1643), 13.6% (24.3%)
$500-749,999: 1567 (850), 27.5% (12.6%)
Under $500,000: 2623 (3292), 46.1% (48.7%)
All properties sold: 5689 (6759), down 15.8%
Compare those October market shares with those in September, this year & last (2016 in brackets):
$1 million-plus: 715 (1020), 13.2% (13.9%)
$750-999,999: 749 (967), 13.8% (13.2%)
$500-749,999: 1419 (1855), 26.1% (25.2%)
Under $500,000: 2545 (3510), 46.9% (47.7%)
All sales: 5428 (7352), down 26.2%.
The Real Estate Institute said median prices rose in 14 of its 16 regions from October last year, lifting the median outside Auckland to a record $440,000. The falls were in Auckland & Nelson. The big contributors to the rise were:
Waikato: up 9.9% to $500,000
Manawatu/Wanganui: up 11.5% to $290,000
Canterbury: up 4.7% to $450,000
Otago: up 14.4% to $412,000.
The institute said Auckland’s median price fall was its biggest since December 2010, while Nelson’s 6.8% fall to $447,500 was its biggest drop since April 2012.
Institute chief executive Bindi Norwell said the Auckland fall was largely the result of a large number of apartments being sold on the isthmus (the old Auckland City – the institute still hasn’t updated its boundaries), which took the median price down for the entire region.
On those old boundaries, Auckland City’s median fell 17% to $850,000, the lowest it’s been for 16 months, Franklin rose 16% to $737,000 and North Shore City remained New Zealand’s only million-dollar plus city.
“Looking at the institute’s house price index for the legacy Auckland City, it only decreased 0.8% year-on-year, whereas the median for the same period fell by 17%, highlighting that the drop in median price is not as dramatic as a first glance would suggest. This is because the index considers the mix & value of the property sold, not just the sales price.”
The number of properties sold by auction continued to decline – 869 in October, down 42% from a year ago but up 4% from September. Auctions now represent 15% of all sales nationally.
In Auckland, where the proportion of sales by auction has traditionally been higher, 464 sales (28%) were by auction, down 44% from a year ago but up 8% from September.
The number of properties available for sale nationally increased by 4% (from 23,385 to 24,307) compared to 12 months ago, and by 17% in Auckland (from 7214 to 8465).
Attribution: Real Estate Institute.