Limited supply pushing house prices up - REINZ

There are 33 percent fewer properties on the market now than this time last year (Getty)
There are 33 percent fewer properties on the market now than this time last year (Getty)

House prices across New Zealand just keep on rising, with supply drying up and sales volume dropping.

According to new data from the Real Estate Institute of New Zealand (REINZ), the median sale price nationwide hit $505,000 in July, only $1000 behind the record set in May. That's up 8.6 percent in a year.

The median Auckland price was $825,000, up 12 percent in a year. The Waikato/Bay of Plenty region has hit a new high for the eighth time in nine months, reaching $450,000.

Taking Auckland out of the equation, the national median house price in July was $390,000, up 10.8 percent on July 2015.

"Prices continue to rise in many regions, showing that demand is still firm," says REINZ spokesperson Bryan Thomson.

"Sales volumes remain below previous periods, as the continued shortage of supply impacts buyers, who are struggling to find properties to buy."

There are 33 percent fewer properties on the market now than this time last year, and sales are down 10 percent. In Auckland, sales dropped 20 percent.

"We will watch market reaction with interest as the expected increase in listing numbers during the spring and summer selling period become available and the market assesses the impact of the recently announced loan-to-value rule changes, the approval or otherwise of the Auckland Unitary Plan and possible interest rate cut."

The official cash rate is expected to be cut 0.25 percent on Thursday to 2 percent.

The REINZ figures are lower than those reported by Quotable Value (QV) earlier this month, perhaps because REINZ uses median prices, rather than the mean, and QV's values are not based on actual sale prices.

"We understand that it must get very confusing for people with so much data available on the real estate market," says Mr Thomson.

"REINZ data provides the most up-to-date and complete set of detailed numbers on national sale prices and trends, plus the factors that underpin them. The key thing is to watch the trends over time, and particularly the seasonally adjusted numbers, as they take month-by-month changes out of the equation and focus on how the market is really moving."

The number of homes sold for more than $1 million jumped 12 percent in the year to July, to 1015 homes. At the other end, the proportion of affordable homes - assuming under $600,000 is affordable - fell from 65 to 60 percent, and those under $400,000 fell 4 percent.

The most expensive Auckland region is the North Shore, where the median sale price was $1,062,500 - up more than $100,000 in a year.

Prices in Manukau have overtaken Waitakere - the median in the former is now $805,000, and the latter, $803,000.