Surge in investor activity sees home values soar across NZ
11 Aug 2016 – Tony Alexander
The REINZ reported this week that in July there were 7,299 dwellings sold around New Zealand. This was down 10% from a year earlier which makes for the first annual decline since October 2014 when sales were for a while knocked back by the imposition of new lending rules from late- 2013 and the Reserve Bank raised interest rates 1% between March and July 2014.
Does this new decline mean the market is stalling? No. Why? Because the key factor causing falling sales appears not to be buyers withdrawing from the market as happened from late-2013 but sellers not placing their properties on the market.
On average in July the time taken to sell a dwelling was 8.5 days faster than average at 30 days. June was 7.8 days faster than average, May 7.6 days and both April and March 4.8 days. Unsurprisingly then because of the supply shortage prices have risen. The average price when adjusted for changes in the types of houses sold each month rose by 2.2% nationwide in July after rising 0.8% in June, 2.1% in May, a.5% in April, and 3.4% in March.
The February rise was 3.9%. The annualised pace of average nationwide price rises in the three months to July was 22.5% from 22.3% three months back, and a 4.5% fall in the three months to January which was when the Auckland market was hit by the 30% minimum deposit requirement imposed on investors and need for buyers to have an IRD number and NZ bank account.