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Regional Commentary and Market Statistics - September 2017

Market Statistics

Property Brokers 12 Oct 2017

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Despite challenging conditions, median residential property prices across New Zealand have increased by 1.2% year-on-year to $525,000 according to the latest market statistics from the Real Institute of New Zealand (REINZ).

Nationally, excluding Auckland, median prices increased 5.7% year-on-year and Auckland median prices remained flat at $845,000. However, on a month-on-month basis, Auckland’s median price increased by 1.2% or by $10,000.

Only two regions experienced price decreases during September (compared to September 2016) – West Coast (down 15.6% to $208,500) and Canterbury (down 3.2% to $426,000).

“Prices across the country increased in all but three regions, evidence that the market continues to grow despite some challenging conditions – including the LVR restrictions and banks continuing to tighten lending conditions. Much of the increase has been driven by the buoyancy in the regions.” Bindi Norwell, CEO at REINZ.

Regional Analysis - Auckland

"The Auckland market has experienced a decrease in sales, so many in the region will be looking forward to a summer increase. There is no doubt that the elections have had a slow-down effect both in terms of buyer commitment and buyer enquiry. However, once we have a Government and the ‘norm’ returns, a lift in momentum and sales volumes is anticipated with some predicting returns to the Q1 – 2017 level. Given the banks’ continued lending restrictions we’re seeing around 20% fewer cash buyers than this time last year."

Compared to September 2016 the median price stayed the same at $845,000. However, most of the TA’s within the region saw increases in their median price over the same time period with Manukau City leading the way with a 7% increase. It was Auckland City and Papakura District only that saw decreases in their median price since September 2016, the latter most significant at -4%. Compared to August 2017, the overall region median increased 1%. The performance of the TA’s was largely negative with only Manukau City and Waitakere City experiencing an increase (5% and 2% respectively). On a seasonally adjusted basis, Auckland's median price did not change compared to August, indicating that the median price rose by exactly what we’d expect in September.

Sales volume in the Auckland region decreased 13% compared to August, with large falls in sales numbers in Franklin District, Auckland City, Manukau City and Waitakere City (11% - 22% decreases). Compared to September 2016 sales fell 32% with volumes decreasing in all TA’s, except for Papakura District. Most notable drops occurred in Auckland City (-46%), Franklin District (-27%) and Waitakere City (-27%). On a seasonally adjusted basis, sales volumes fell 9% compared to August indicating that the decrease in sales from August was much greater than expected. The number of days to sell improved by three days in September, from 40 days in August to 37 days in September.

The number of days to sell eased by three days compared to September 2016. Over the past 10 years the average number of days to sell during September for Auckland has been 34 days. There are now 23 weeks of inventory in the Auckland region, an increase of 11 weeks compared to September 2016.

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Regional Analysis - Northland

"We have had a slowing down leading up to the election but it picked up with a hiss and a roar almost immediately after the election was over - even with the ongoing uncertainty around the coalition negotiations. We have a good level of buyer enquiries and a slight increase in the number of listings coming through. Interestingly, some areas within Northland such as Kerikeri have very few listings under $500,000, so most sales are $600,000 plus but when a cheaper home is listed it sells very quickly."

The median price across the region rose by $56,000 (+14%) compared to September 2016. Prices rose 46% in Kaipara, 18% in Far North, 8% in Whangarei. Compared to August 2017, the median price increased $16,000 (4%) with prices falling 13% in Kaipara, but increasing 17% in Far North and 0% in Whangarei. On a seasonally adjusted basis the median price rose 2% compared to August, indicating that the increase in median price was a little more than expected.

Sales volume in Northland increased 9% compared to August with sales rising 15% in Whangarei, 4% in Kaipara and 2% in Far North. Compared to September 2016, sales volumes fell 29% across the region, with a 41% fall in Far North, 23% fall in Whangarei and a 10% fall in Kaipara. On a seasonally adjusted basis, sales increased 2% compared to August, indicating that the increase in sales from August was a little more than expected. The number of days to sell improved by one week compared to August, from 46 days in August to 39 days in September.

The number of days to sell eased by two days compared to September 2016. Over the past 10 years the average number of days to sell during September for Northland has been 59 days. There are now 34 weeks of inventory across the Northland region, an increase of 10 weeks over the past 12 months.

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Regional Analysis - Waikato

"There is huge confidence in the Waikato, particularly in the greater Hamilton area. There is still a lot of buyer interest from people looking to relocate from Auckland with about 35% of buyers from out of town. Due to lack of available supply, prices remain relatively firm and investors with a robust equity position are still active in the market. Demand in the north-eastern suburbs has picked up, largely due to new builds being completed and the new Rototuna High School zone."

The median price across the region rose $21,500 (+5%) compared to September 2016. Prices rose 36% in Otorohanga and 27% in Waitomo. Compared to August the median price stayed the same, with prices rising 36% in Otorohanga but falling 20% in Waitomo District. On a seasonally adjusted basis, prices fell 3% compared to August indicating that the median price is typically expected to rise slightly in September.

Compared to August, sales volumes fell 6%, with sales increasing 40% in Otorohanga District, but decreasing 58% in Waitomo. Compared to September 2016, sales across the region fell 27% with sales increasing 54% in South Waikato District but falling 56% in Hauraki District. On a seasonally adjusted basis, sales for September decreased 3% compared to August, indicating that the decrease in sales volume was a little greater than expected for September.

The number of days to sell improved by four days compared to August, from 39 days in August to 35 days in September. The number of days to sell eased by five days compared to September 2016. Over the past 10 years the average number of days to sell during September for Waikato has been 46 days. The level of inventory across the region is 15 weeks, an increase of five weeks compared to September 2016.

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Regional Analysis - Bay of Plenty

"The Bay of Plenty market remain subdued compared to this time last year with both listings and sales down, however, prices are holding up in a number of areas within the Bay. New stock coming on to the market is slow and the spring increase has yet to kick in. There are 30% fewer cash buyers in the market when compared to the same time last year. Interestingly, owner occupiers make up about 60% of buyers (whereas in August this group made up 95% of buyers), with the remaining 40% split equally between first home buyers and investors."

The median price across the region increased $40,000 (8%) compared to September 2016. Prices rose 18% in Whakatane but fell 11% in Opotiki. Compared to August the median price increased $12,500 (2%), with Whakatane District leading the way with a 17% increase. On a seasonally adjusted basis prices did not change compared to August indicating that the increase in median price was what would be expected at this time of year.

Compared to August, sales volumes decreased 14%, with sales count decreasing 27% in Rotorua and 17% in Opotiki. Compared to September 2016 sales across the region fell 21% with sales dropping by over 19% in all TA’s except Tauranga (-7%). There were no sales in Kawerau District this month. On a seasonally adjusted basis, sales for September decreased 8% compared to August, indicating that the decrease in sales count was larger than expected for this time of year.

The number of days to sell improved by four days in September, from 41 days in August to 37 days in September. The number of days to sell eased by two days compared to September 2016. Over the past 10 years the average number of days to sell during September for Bay of Plenty has been 52 days. Compared to September 2016, the level of inventory across the region has increased by four weeks to sit at 15 weeks of inventory in September 2017.

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Regional Analysis - Hawkes Bay

"Overall, the Hawke’s Bay market has been relatively slow in September with many buyers and sellers waiting for certainty after elections, however, we believe things will improve in the coming months. Last month the region experienced record median prices, so it’s no surprise that vendor price expectations have risen around 10% compared to August 2017. There are around 30% fewer first time buyers in the market than the previous month, suggesting that price expectations are starting to impact this group."

The median price rose $60,500 (+18%) compared to September 2016. Prices rose 28% in Napier, and 11% in Hastings. The median price decreased $13,000 (-3%) compared to August, with prices rising 20% in Central Hawke's Bay but falling 6% in Hastings. On a seasonally adjusted basis the median increased 1% compared to August, indicating that the decrease in median price was not as large a decrease in median price as expected at this time of year.

Sales volumes in Hawke's Bay fell 22% compared to September, with sales rising 70% in Central Hawke's Bay but falling 29% in Napier and 23% in Hastings. Compared to August sales, volumes decreased 15%, with sales falling 26% in Napier and 6% in Central Hawke's Bay. There were no sales in Wairoa District this month. On a seasonally adjusted basis, sales for September fell 8% compared to August indicating that the decrease in sales count was larger than expected for September.

The median number of days to sell improved by two days compared to August, from 30 days in August to 28 days in September. The number of days to sell improved by two days compared to September 2016. Over the past 10 years the median number of days to sell for the Hawke's Bay region in September has been 43 days. The region has the second lowest level of inventory across New Zealand with just eight weeks of supply, two weeks less than in September 2016

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Regional Analysis - Taranaki

"The LVRs, a lack of listing stock and a very wet start to spring have all impacted on the Taranaki market this month. There are approximately 30% fewer first home buyers looking for properties and 50% less buyers are ‘cash’ buyers when compared to the same time last year. As the weather improves and both buyer and potential vendor motivation lifts we should see a slight improvement in the market going forward."

The median price across the region rose $14,000 (+4%) compared to September 2016 with prices rising 8% in New Plymouth but falling 9% in Stratford. Compared to August the median price rose $31,000 (+9%), with prices rising 19% in South Taranaki but decreasing 9% in Stratford. On a seasonally adjusted basis the median price increased 2% compared to August indicating that the increase in median price was slightly higher than expected moving from August to September.

Sales volume for the Taranaki region increased 11% compared to August with sales rising 20% in New Plymouth but falling 4% in South Taranaki. Compared to September 2016 sales volumes fell 4% with sales falling 13% in New Plymouth but rising 26% in South Taranaki. On a seasonally adjusted basis, sales rose 20% compared to August, indicating that we typically experience a decrease in sales moving from August to September rather than the large increase that occurred this month.

The number of days to sell improved by a week compared to August, moving from 46 days to 39 days in September. Compared to September 2016 the number of days to sell eased 8 days. Over the past 10 years the median number of days to sell across the region in September has averaged 46 days. There are currently 16 weeks of supply across the Taranaki region compared to 18 weeks in September 2016.

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Regional Analysis - Manawatu/Whanganui

"Following the record high in the Manawatu/Whanganui region last month, the median price of homes has eased slightly in the region this month which will be welcome news to first time buyers who are struggling to get into the market. Reflecting this change, we’ve seen approximately 10% more first time buyers active in the market than this time last year. Despite the ease in median price, there has been no change in vendors’ expectations of asking prices. LVRs are continuing to impact investors with around 30% fewer investors compared to this time last year."

The median price across the region rose $21,000 (+8%) compared to September 2016. Median prices rose 51% in Ruapehu District, 33% in Rangitikei and 18% in Manawatu District. Compared to August the median price decreased $14,000 (-5%), with prices rising 8% in Manawatu but falling 21% in Tararua and 17% in Horowhenua. On a seasonally adjusted basis the median price decreased 6% compared to August, indicating we typically expect a small increase in median price when moving from August to September, as opposed to the moderate decrease we did observe.

Sales count fell 16% compared to September 2016, with sales count decreasing by over 25% in Whanganui, Manawatu and Horowhenua. Conversely, the Ruapehu District saw a 41% increase in sales count. Compared to August, sales count decreased 2%, with sales in Manawatu and Horowhenua dropping 38% and 28% respectively, and Rangitikei and Ruapehu increasing their sales count by 64% and 41% respectively. On a seasonally adjusted basis, sales across the region increased 1% compared to August, indicating that we typically observe a slightly stronger decrease moving from August to September than the decrease which occurred.

The number of days to sell improved by 3 days compared to August, moving from 31 days to 28 days in September. The number of days to sell improved by one day compared to September 2016. Over the past 10 years the average number of days to sell during September for the region has been 47 days. The level of inventory available for sale has stayed level compared to September 2016 to stand at 13 weeks.

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Regional Analysis - Wellington

"The Wellington market still has less than seven weeks’ inventory, although some pockets of the region are starting to report a slow increase in the number of listings over the last month. There are still a number of first home buyers who are actively looking for properties although lending is still very tight. We’re seeing increasing numbers of investors coming back to the market, however, there is still a lack of rental properties and apartments to choose from. Over the next few months we expect to see more listings come onto the market and prices to remain stable, but there’s no spring rush just yet."

The median price for the Wellington region rose $51,000 (+11%) compared to September 2016. The median price rose 30% in Masterton, 28% in Kapiti Coast, and 18% in South Wairarapa. Compared to August, the median price increased $26,000 (+5%), with median prices rising 13% in South Wairarapa but decreasing 11% in Carterton. On a seasonally adjusted basis the median price increased 2% indicating that the increase in the median price was a little more than expected when moving from August to September.

Compared to September 2016, sales volumes fell 31% across the region with sales falling by over a third in Wellington City, Masterton District, Porirua City and Upper Hutt City. Compared to August, sales volumes decreased 10%, with sales falling furthest in Masterton (-45%) and Upper Hutt (-32%), but increasing the most in Kapiti Coast (+11%). On a seasonally adjusted basis, sales fell 6% from August, indicating that the decrease in the sales count was larger than expected when moving from August to September.

The number of days to sell improved two days compared to August, from 29 to 27 days. The number of days to sell stayed the same compared to September 2016. Over the past 10 years the average number of days to sell during September for the region has been 35 days. The level of inventory in Wellington was the same as in September 2016, and at 6 weeks it remains the lowest level of inventory across the country.

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Regional Analysis - Nelson/Marlborough/Tasman

"Despite the decrease in sales for the Nelson/ Marlborough/Tasman region, vendor expectations continue to remain positive and prices continue to hold firm. Approximately 70% of buyers during September were locals compared to 50% in August. Spring and summer is always a busy time in the region as we are a popular national and international recreation destination for many who also choose in growing numbers to invest here.”

The median price for the Nelson/Marlborough/Tasman region rose $22,000 (+5%) compared to September 2016. Prices rose 19% in Tasman and 7% in Nelson and Marlborough. Compared to August the median price for the region fell $3,000 (-1%), with prices rising in Tasman (+16%) but falling in Marlborough (-6%) and Nelson (-8%). On a seasonally adjusted basis the median price had 0% movement indicating that the increase in the median price was exactly what was expected at this time of year.

Compared to September 2016, sales volume fell 28%, with sales decreasing 37% in Tasman, 27% in Marlborough and 20% in Nelson. Compared to August, sales volumes decreased 17% across the region with sales decreasing 34% in Marlborough, 9% in Tasman and 2% in Nelson. On a seasonally adjusted basis, sales decreased 7% compared to August indicating that the decrease in sales was greater than expected moving from August to September.

The number of days to sell in September improved two days compared to August, moving from 29 days to 27 days. Compared to September 2016 the number of days improved by one day. Over the past 10 years the number of days to sell in September across the region has averaged 40 days. There was 14 weeks of supply across the region in September, three weeks more than in September 2016.

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Regional Analysis - West Coast

"The West Coast market has had a tough month with volumes of sales down, the median price down and listings down when compared to the same time last year. One small positive however, was the fact that the number of days to sell a property has decreased by 13 days when compared to the same time last year, but when compared to September 2015 the number of days was down by 108 days."

The median price across the region fell $38,500 (-16%) compared to September 2016, with prices falling 23% in Grey, 10% in Buller and 3% in Westland. Compared to August, the median price increased $28,500 (+10%) with Grey and Buller increasing 27% and 7% respectively. On a seasonally adjusted basis, the median price increased 1% which indicates that the median price increased only slightly more than would be expected when moving from August through to September.

Sales volume for the West Coast Region fell 10% compared to September 2016, with sales decreasing 36% in Grey, staying the same in Buller and increasing 10% in Westland. Compared to August, sales volume decreased 15%, with sales count decreasing 59% in Grey, increasing by 15% in Buller and increasing by 83% in Westland. On a seasonally adjusted basis, sales decreased 13% compared to August, indicating that sales decreased much more than expected for this time of year.

The number of days to sell eased by 26 days in September, from 79 days in August to 105 days in September. Compared to September 2016, the number of days to sell improved by 13 days. Over the past 10 years the number of days to sell in September across the region has averaged 98 days. There were 69 weeks of supply across the region in September, a decrease of 13 weeks compared to September 2016.

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Regional Analysis - Canterbury

"The Canterbury market felt like a steady, normal market over the last month but the sales figures haven’t necessarily reflected that, whether it was a preoccupation with the election drama or a real turn in the market, it’s too early to say. Certainly, banks are a lot more selective on loans and that is impacting marginal property and some buyers, overall the market has felt tight but steady. Open home attendance levels have returned to what we were seeing in the market this time last year, suggesting that activity is starting to increase. Over the next few months I think we will have a small lift in sales to reflect the typical spring lift - there is obviously activity out there, consultants just have to hunt and hustle a bit more to find it."

The median price decreased $14,000 (-3%) compared to September 2016. The TA’s were a mixed bag with Waimate the biggest drop in median (-22%) and Mackenzine was the largest gain at 42%. Compared to August the median price decreased $250 (-0%), with the Waimate median price decreasing 20% and Mackenzie increasing 9%. On a seasonally adjusted basis the median price decreased 1% compared to August, indicating that a small increase in the median price was expected at this time of year.

Sales volume across the region fell 25% compared to September 2016, with sales volume falling furthest in Mackenzie (-56%), Ashburton (-32%), and Hurunui (-29%). Compared to August sales count decreased 13%, with sales increasing most in Mackenzie (40%), Kaikoura (29%) and Waimakariri (+16%), but falling in Selwyn (-25%), Christchurch City and Waimate (-15%). On a seasonally adjusted basis, volumes decreased 9% compared to August indicating that the decrease in sales was greater than would be expected moving from August to September.

The number of days to sell improved by three days in September from 37 days in August to 34 days in September. Compared to September 2016 the number of days to sell eased by three days. Over the past 10 years the number of days to sell in September across the region has averaged 34 days. There was 17 weeks of inventory available in September, an increase of one week compared to September 2016.

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Regional Analysis - Otago

"In Dunedin the anticipated spring rush has not happened. Investors are scarce as the 40% deposit is proving to be too much for them, first home buyers are abundant and second and third home buyers have very little selection, but they are keen to trade up down and sideways, but stock shortages do limit their activity hugely. The election is likely to have had some effect on volumes causing them to drop and this looks set to continue due to the coalition negotiations. However, this does result in a positive effect on price. Once the Government is decided, there is only a short time before Christmas to see a massive increase in volumes, so this may have to wait until after Christmas. There is a huge desire to trade houses among the public however, so at some stage this desire will be expressed." Dunedin City.

"Banks in the Queenstown area are now showing an eagerness to loan, however, the perception in the market place is that it is still difficult to obtain finance as this has been the reality for all of 2017 to date. Queenstown is unique in that it is in the midst of tourism which overall in New Zealand is performing well and being in the hub of it, the town is very buoyant. As a result, the median price in the area continues to rise which is generally proving too high for first time buyers, however, investors now appear to be taking advantage of fewer buyers in the market." Queenstown.

The median price across Otago rose $22,500 (+6%) compared to September 2016 with prices rising 18% in Queenstown-Lakes and 16% in Dunedin City. Compared to August the median price increased by $12,500 (3%) with prices increasing 23% in Clutha and 8% in Queenstown-Lakes. On a seasonally adjusted basis the median price increased 4% indicating that a small decrease was expected moving from August to September, rather than the observed increase in median price.

Sales across the region fell 17% compared to September 2016, with Queenstown-Lakes falling 38% and Waitaki falling 33%. Compared to August sales decreased 2%, with sales count increasing 63% in Clutha but falling 16% in Waitaki. On a seasonally adjusted basis, sales count stayed the same compared to August, indicating that the observed decrease in sales was exactly what is expected moving from August into September.

The number of days to sell in Otago improved by four days in September from 34 days in August to 30 days in September. Compared to September 2016 the number of days to sell eased by five days. Over the past 10 years the average number of days to sell in Otago in September was 39 days. There are currently 10 weeks of inventory across the region, the same as in September 2016.

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Regional Analysis - Southland

"The Southland market has experienced a decrease in listings and volumes, but prices have continued to increase bolstering the market. However, if looking at the REINZ HPI you can see that overall, the region has held up significantly with a new high for the Index. There are fewer investors in the market at the moment, but interestingly we’re seeing an increased number of local buyers in the market."

The median price across Southland rose $20,000 (+10%) compared to September 2016. The median price in Southland increased 19%, Gore increased 12% and Invercargill by 7%. Compared to August, the median price decreased $30,000 (-12%) with prices rising 15% in Gore but falling 15% in Invercargill and 2% in Southland. On a seasonally adjusted basis the median price decreased 14% compared to August, indicating that an increase in median price was expected moving from August to September, rather than the large decrease that was observed.

Sales volumes fell 34% compared to September 2016. All TA’s saw drops in sales count, ranging from a 21% drop in Southland to a 39% drop in Invercargill. Compared to August, sales volumes decreased 10% with sales falling 20% in Invercargill but increasing 42% in Southland. On a seasonally adjusted basis, sales fell 2% compared to August indicating that the decrease in sales count was slightly more than expected moving from August to September.

The number of days to sell in Southland improved by nine days in September, from 37 days in August to 28 days in September. Compared to September 2016 the number of days to sell stayed the same. Over the past 10 years the number of days to sell in September for the Southland region has been 38 days. There is currently 16 weeks of inventory in Southland, an increase of 3 weeks compared to September 2016.

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