New Zealand’s house sales growth remains strong, prices continue to accelerate countrywide

New Zealand’s national median house price has surpassed the $500,000 mark for the first time, touching $506,000 in May, according to REINZ. Growth in house sales continues to be robust, whereas inventories continue to fall. Prices across the nation continued to grow.

National house sales volumes, in seasonally adjusted terms, softened by 2.8 percent in May; however, this followed robust increase in the prior three months, with volume growth accelerating to 9.8 percent 3m/3m. The monthly sales’ level was the second highest in the past nine years.

Volume of sales, on an annual basis, grew 13.6 percent, a slowdown from 18.4 percent. The difference between Auckland and the rest of New Zealand continued to be severe, with sales in Auckland rising just 1.2 percent y/y, as compared with 21.7 percent growth seen outside of Auckland. Northland reported 60 percent of growth in sales, Southland 58 percent, Manawatu/Whanganui 35 percent, and Central Otago lakes also 35 percent. Meanwhile, Canterbury recorded sales growth of 9.4 percent y/y and was lower than the nationwide average.

In spite of the slight pull-back in sales volumes, levels of inventory declined severely, with the median number of days to sell declining two days to 30.2 days. In Wellington, Auckland and Hawke’s Bay have reported quite tight levels of inventory.

Prices across the country continued to rise. The REINZ stratified measure recorded a seasonally adjusted rise of 2.1 percent m/m,  6 percent 3m/3m and 14.5 percent y/y. Meanwhile levels of house price reached a new record high.

According to the stratified house price measures (seasonally adjusted), the rise in May was mainly due to increases outside of Auckland. Prices in Auckland fell 0.2 percent on seasonally adjusted basis in May, whereas annual house price inflation eased to 8.1 percent y/y. In other regions, prices accelerated, with annual house price inflation accelerating 18.6 percent in Wellington, 22 percent in South Island areas outside of Christchurch and 22 percent in the Rest of the North Island.