The Real Estate Institute said yesterday the median house sale price nationally rose 5.8% in December compared to a year earlier, and 6.6% excluding Auckland.
In Auckland, the median rose 1.8% over the 12 months.
The moves were:
Nationally: 5.8%, from $520,000 to $550,000
Excluding Auckland: 6.6%, from $422,000 to $450,000
Auckland: 1.8%, from $855,000 to $870,000.
The cyclical context
Those differences are normal. Auckland habitually leads cycles up, peaks as other centres start to rise, and softens while the rest of the country is still trying to catch up. When everything settles down, the margin between Auckland prices and those everywhere else will be bigger than it was before the cyclical rise.
The difference that is abnormal is that Auckland has been subjected to a hefty population increase for the second time this century – first in 2003-04 under the Clark Labour government, from which it hadn’t fully recovered before the National-led government enabled a new influx into Auckland over the last 5 years, with no attempt on either occasion to spread the growth.
Through a period of 15 years, Auckland’s housing supply has been inadequate to meet demand. For the real estate sector, and for political purposes, that’s been just fine: a tight market encourages competition & price hikes.
The Real Estate Institute said prices rose in 13 of its 16 regions in December, 3 of them to record levels:
Waikato: up 11.7% from $470,000 a year ago & $490,000 in November to $525,000 in December
Bay of Plenty: up 20.4% from $496,500 a year ago & $575,000 in November to $598,000, and
Wellington: up 4.7% from $535,000 a year ago & $550,000 in November to $560,000.
At the other end, prices fell from a year ago in 3 regions:
Marlborough: down 2.1% to $372,000
West Coast: down 1.6% to $185,000, and
Canterbury: down 0.7% to $439,000.
Real Estate Institute chief executive Bindi Norwell said December 2017 was the first time all 7 districts in Auckland (the institute still bases its statistics on the boundaries of the 7 cities & districts that formed the super-city in 2010) had a median price above $700,000.
She said this highlighted “how expensive the city is becoming”. In addition, “North Shore City [as it was] has reached a record median price of $1,113,000. The nearest the price has been to this point previously was $1,105,000 in November 2016.”
Volumes still struggling
The institute said sales nationally fell 10.1% in December from a year ago, from 6567 to 5903; 11.6% excluding Auckland, from 4733 to 4184; and 6.4% in Auckland, from 1808 to 1693.
Nelson was the only region where sales rose from a year ago, from 71 to 76.
The institute’s house price index increased nationally by 3.8% from a year ago to 2655, by 6.8% excluding Auckland, and by 0.7% in Auckland.
Auctions fall away
Auctions’ share of the national market fell from 18% a year ago to 14% – down from 1154 sales to 827.
55% (455) of the December 2017 sales were in Auckland.
The number of properties available for sale nationally increased by 9.3% (from 22,521 to 24,610), and by 2.1% excluding Auckland (from 15,784 to 16,113).
Broken into price brackets, the number sold in December fell compared to a year ago in all except the $2-3 million category, which increased by 4.3% (from 92 to 96).
The number sold for less than $500,000 fell 18% (from 3148 to 2577). The latest figure for that bracket represented 43.7% of all sales.
Attribution: Real Estate Institute release.