No more affordable regions in Auckland

Still looking for an affordable house in Auckland? We've got some bad news.

There's not a single district in the super city with a median price in the affordable range, new figures from the Real Estate Institute of NZ (REINZ) show.

"This is the first time that all seven districts have had a median price of in excess of $700,000, highlighting how expensive the city is becoming," says chief executive Bindi Norwell.

"Additionally, North Shore City 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."

The Government's Kiwibuild scheme defines affordable in Auckland as being between $500,000 and $600,000. The previous National-led Government defined affordable as under $650,000.

Thursday's figures show Auckland prices increased by 1.8 percent in 2017, and nationwide by 5.8 percent - lower than in recent years, but still a gain, which surprised REINZ.

"This increase defies the predictions of many commentators who 12 or 13 months ago were adamant that house prices would fall in 2017."

REINZ reported in November that Auckland prices had started slipping, dropping 3.2 percent year on year, but said that may have been the result of a large number of apartment sales in the CBD.

The only regions in New Zealand which saw sale prices drop were:

  • Marlborough, down 2.1 percent to $372,000
  • West Coast, down 1.6 percent to $185,000
  • Canterbury, down 0.7 percent to $439,000.

The fastest-rising prices can be found in:

  • Waikato, up 11.7 percent to $525,000 - most of that gain since November
  • Bay of Plenty, up 20.4 percent to $598,000
  • Wellington, up 4.7 percent to $560,000.
REINZ prices
Photo credit: REINZ

ASB Bank credits the Auckland buoyancy on a lift in sales in the last few months of 2017, particularly in Auckland - perhaps due to incoming legislative changes.

"For example, the change in legislation to ban foreign buyers could have bought forward demand in order to get in ahead of the changes," says ASB economist Kim Mundy.

The median price in Auckland according to REINZ is now $870,000, up from $850,000 a year ago. According to QV, the average value in the super city is $1,045,741.

QV's average value nationwide - $664,485 - is also above the REINZ median price of $550,000. The discrepancy could be that QV uses mean values, which can be dragged higher by particularly expensive properties that may not even be for sale, while REINZ's median value is based on actual sale prices.

For example, 96 properties priced between $2 million and $3 million sold in 2017 - up from 92 the year before - while there was an 18 percent fall in the number of homes selling for under $500,000 and a 30 percent drop in properties selling for under $250,000.

"This was the lowest number of properties in this bracket on record, showing how price increases are impacting across the regions," said Ms Norwell.

First-home buyers still missing out

"While the increase will be welcome news to those looking to sell their property, for those first-home buyers this will not have been the Christmas present they were hoping for," said Ms Norwell.

"Although there is some hope as the rate of price increases has decreased significantly compared to previous years meaning that if the trend continues, there is more of a chance that those saving for a house deposit can keep up with increasing property prices."

Andrew King, executive officer of the Property Investors Federation told Newshub on Thursday morning landlords were bailing on the market, but having trouble finding buyers.

ASB says sales lifted for the third consecutive month in December, but changes made by new coalition Government may dampen investor demand, but this will be "offset to some degree" by policies friendlier to first-home buyers.

"Outside of legislative changes, we continue to expect housing shortfalls and population growth to provide a floor to house prices over 2018," said Ms Mundy.

The number of properties sold in December was 10.1 percent lower than in December 2016, REINZ said, while supply was 9.3 percent higher.