Defying predictions right and left, New Zealand’s housing market keeps hurtling forwards, like a runaway train. April’s data shows that following a strong rebound in March, the Auckland market’s growth story is ongoing – albeit at a slightly more sedate pace. Meanwhile, growth in many regional markets has been accelerating.

This combination of Auckland’s resurgence and continued strength in the regions has sparked consternation across the board. Not only is there little doubt now that further macro-prudential policy is on the horizon, but the Government has started to apply supply-side pressure to councils perceived as tardy.

Taking It Easy

Realestate.co.nz’s data was first off the blocks in April. It shows minimal change in Auckland’s average asking price over the month.

The city’s average asking price came in at $861,305, which was down by 0.1% on March’s average asking price. It also shows in Auckland weeks to sell fell by 2.78% in April 2016, compared with the same time last year, and that listings in the city were down year-on-year.

Realestate.co.nz CEO Brendon Skipper says Wellington’s housing market stole the lime light from Auckland’s in April. “The capital’s inventory levels are at a record low, there is upward pressure on prices with 2% growth in April, and there are plenty of buyers out there.”

Confirmation that April activity in Auckland’s market was more subdued than expected came in Barfoot & Thompson’s latest data. It shows a big drop in sales numbers, along with only small increases in both the average sales price and the median sales price in April.

Restrained April Market

The average sales price was up by 0.8%, to $873,599 and the median sales price was up by 2.8%, to $820,000, compared with March. Barfoot & Thompson managing director Peter Thompson, who describes April’s market as restrained, says house prices have pulled back from breaking into new territory.

The year-on-year increase in the average sales price was less in April than it was earlier this year, Thompson says. “While it was 8.6% ahead of where it was in March last year, for the past year we have been looking at monthly year-on-year increases of around 12%.”

The agency’s sales numbers dropped significantly in April. They were down 29.6% on March and 11.8% year-on-year. Thompson says they sold the lowest number of homes in April that they have sold in an April in four years. Further, new listings were down for the third consecutive month.

Reversing Trend

The latest Quotable Value (QV) data provided a contrary view, however. It shows that Auckland’s market, while not the star performer, had reversed its recent downward trend in values.

Auckland’s values increased by 1.5% over the past three months and by 16.5% year-onyear, which left the region’s average value at $942,760. This means they are now 72.5% above the 2007 market peak. Once adjusted for inflation, Auckland’s values were up 16.0% year-on-year and are 47.1% higher than in 2007.

QV national spokesperson Andrea Rush says values in all parts of the Auckland region are increasing again. “But they are rising at a slower rate than other upper North Island centres, like Hamilton, Tauranga and Rotorua, and districts in surrounding areas,” Rush says. The QV data is supported by Trade Me Property’s April data. It shows the Auckland market has continued to surge forward, with the average asking price increasing to a new record of $843,150. This is up 1% on March’s average asking price of $834,500, and up 13.8% year-on-year.

Off The Pace?

However, the April data from the Real Estate Institite of New Zealand (REINZ) suggests Auckland’s trajectory has slipped off the pace – slightly. Auckland’s median price dropped by 1% to $812,000 in April, from $820,000 in March, according to the REINZ data.

Once seasonally adjusted, Auckland’s median price was down by just 0.6%. But, as compared to April 2015, Auckland’s median price was up by 12.8%, or by 11.4% once seasonally adjusted. SuperCity sales dropped by 13.2% in April as compared to March but, once seasonally adjusted, they were actually up 16.5% on March. When compared with April 2015, sales were up by 1.7%, or by 3.2% once seasonally adjusted.

While these figures are more subdued than some of the growth highs the city saw last year, they come on the heels of a significant rebound in both prices and sales in March – the strength of which surprised many commentators.

While It Was 8.6% Ahead Of Where It Was In March Last Year, For The Past Year We Have Been Looking At Monthly Year-On-Year Increases Of Around 12% – Peter Thompson

REINZ chief executive Colleen Milne says the Auckland region has seen a rebound in sales over the past two months with continuing strong demand across most of the region. “The listing situation has tightened again, with the number of weeks of inventory dropping back to 10 weeks, a near record low,” Milne says. “Demand remains strong and the adjustment period after the introduction of new LVR rules is over."

Regional growth

All of April’s data shows property markets nationwide are turning in robust growth, with rising prices and sales. The April QV data shows nationwide values increased by 2.1% over the past three months and by 12% year-on-year, which left the national average at $568,058.

This means they are now 37.1% above the 2007 market peak. Once adjusted for inflation, national values were up 11.6% yearon- year and are 16.9% higher than in 2007. The comparatively more sedate nature of Auckland’s market, however, did impact on the REINZ national data. Both the national median price and national sales volume were down, as compared with March – although when Auckland was excluded it was a different story.

The national median price dropped by 1% in April to $490,000. But it was up by 1.4% once seasonally adjusted and by 7.7% year on- year. Once the impact of the Auckland region was excluded, however, the national median price rose $29,000 to $382,000, compared with April.

National sales volumes were down by 10.1% in April, compared with March. But they were up by 12.8% once seasonally adjusted and by 18.4%, or 19.6% when seasonally adjusted, year-on-year. Once Auckland’s impact was excluded, national sales volumes were up by 28.8%, or 29.4% when seasonally adjusted, year-on-year.

Star Performers

QV’s data shows all the main centres and many regional centres saw values increase during April. Values were up in Wellington, Dunedin and Christchurch, while Queenstown values accelerated in the past three months (up 6.6%).

Hamilton and Tauranga, however, turned in April’s star performances. Hamilton’s values increased by 5.2% over the past three months and 25.3% year-onyear, leaving the average value at $471,072. Tauranga’s values were up 3.6% over the past three months and 21.5% year-on-year, which left the average value at $577,494.

Rush says much of the growth was driven by the promise of record low interest rates continuing and increased activity by people looking outside of the main centres for either more affordable homes or higher rental yields.

The April REINZ data shows record median prices were reached in the Waikato/ Bay of Plenty, Taranaki, Canterbury/ Westland and Otago regions. At the same time, all regions experienced increases in sales volume year-on-year, as listings continued to decline around the country.

In Milne’s view, the data confirmed the continued strength of the market around New Zealand, which is being driven by a chronic lack of supply.