NZ house prices growing while Auckland 'has found middle ground' - report

Only Auckland, Gisborne and Southland saw an annual house price decrease.
Only Auckland, Gisborne and Southland saw an annual house price decrease. Photo credit: File

New Zealand's average house prices continue to balloon, while Auckland is levelling out, according to a report. 

New Zealand has achieved a new record average house price of $562,000, a five percent annual increase of $27,000, according to the Real Estate Institute of New Zealand (REINZ). 

However, the average house price in Auckland has dropped slightly by 1.3 percent from the same time last year, with May 2018 seeing a price of $852,000, down from $862,800 in May 2017. 

"Only three regions saw a year-on-year price decrease: Auckland, Gisborne and Southland," said Bindi Norwell, chief executive at REINZ. 

But Aucklanders shouldn't get too excited. Ms Norwell explains that despite the annual decrease in house prices, Auckland's average price of $852,000 is actually up $2000 on April 2018. 

Auckland's house prices appear to have decreased on an annual basis, Ms Norwell explains, but the housing market isn't necessarily experiencing a price decline - "it's just a result of a decrease in $1 million plus properties year-on-year."

But Ms Norwell says it seems like the Auckland housing market "has found a middle ground around the $850,000 mark, as three out of the past five months have seen a median price in this range."

"This suggests that the standoff between buyers wanting a bargain and sellers wanting an unrealistic price is coming to an end," she says. 

But for the rest of the country, house prices are steadily rising.  

In Northland, average house prices have gone up 6.7 percent to $475,000, according to REINZ. Meanwhile, house prices in Tasman have gone up 16.2 percent to $612,000 - the first time average house prices in the area have gone over $600,000. 

Despite the cost of buying a house in New Zealand increasing, the number of houses sold in May 2018 rose by 1.3 percent across the country from 7482 in May 2017 to 7578 in May 2018. 

However, the number of properties sold in New Zealand excluding Auckland decreased 0.5 percent. 

Nevertheless, house sales in Nelson increased 25.3 percent from 83 sales to 104 annually, according to the data, while Gisborne saw an increase of 15.8 percent from 57 sales to 66. 

The West Coast experienced a huge 20.9 percent increase in house sales from 43 to 52 annually - the highest count in six years. 

The number of houses sold in Auckland increased 5.4 percent annually from 2,211 in May 2017 to 2,331 in May 2018.

While it may seem like good news that Auckland's property market "has found middle ground", general housing affordability is getting worse, according to results from the Housing Affordability Measure (HAM) by the Ministry of Business, Innovation and Employment (MBIE). 

Auckland stands out as the most unattainable city in the country, with 84.23 percent of residents unable to comfortably afford a first home.