Propertyscouts Hamilton

'Hyper months' ahead as Waikato/BoP property market outpaces Auckland? - 20th Jan 2016

'The news just keeps getting better.'

The supercity has taken a back seat to its nearest neighbours as Waikato and Bay of Plenty team up with Northland to set the pace in the New Zealand housing market.

Waikato and Bay of Plenty, along with other regions, have overtaken Auckland as growth engines of the housing market, the latest real estate industry figures show.

Hamilton prices alone show an almost 20 per cent rise over a year ago.

Record median prices were set in Waikato/Bay of Plenty, Hawke's Bay, Wellington, Nelson/Marlborough and Otago as the market strengthened in December, according to the Real Estate Institute of New Zealand (REINZ).

Lugton's managing director Simon Lugton, in his observations of the REINZ data, said the Hamilton market showed signs of returning to the "hyper months" of July and September 2015.

As usual, house sales dipped ahead of Christmas, falling 9 per cent on the previous month, although it was up 3.5 per cent a year earlier.

Hamilton sales in December 2015 (342) were subdued but still 12 per cent higher than December 2014 (305).

But December 2014 was an exceptional month, the strongest of the year after the Reserve Bank's loan-to-value ratios were shrugged off by buyers.

"So a modest increase of 12 per cent on last year's results, when put in that perspective, demonstrates the continued strength of the Hamilton market," said Lugton.

 

A dramatic tightening of available housing stock for sale ended the year, he said. Listings on realestate.co.nz dropped from 670 to 491 since October, fewer than five weeks' supply.

"Whilst investor demand remains high those stocks may take months to replenish to more normal volumes.

"The result of this will likely be increased competition and renewed price rises like Hamilton experienced from July to September."

National prices did not pause for breath either as the national median house price climbed to $465,000, up 1.2 per cent on the previous month and 3.3 per cent on the previous year.

Excluding Auckland, house prices hit a record $379,000, up 8 per cent on a year ago.

In Hamilton, the median price of $449,500 was up 18 per cent on the same time last year.

Pricey houses nationally were particularly in demand, with sales in the $1 million-plus category rising 20 per cent over the year.

REINZ chief executive Colleen Milne said sales outside Auckland were clearly picking up, rising 17.5 per cent on the previous December, and the spillover effect from Auckland did not explain it all.

"Regional markets, particularly Northland, Waikato/Bay of Plenty, Hawke's Bay and Central Otago Lakes are now setting the pace for the New Zealand real estate market, with Auckland, in a relative sense, now in the middle of the pack," Milne said.

She thought the decline in sales in Auckland would be "transitory" as investors got to grips with the new rules, but other regions had stolen the show with "noticeable" price increase, big drops in inventory and days to sell.

"This breadth of the improvement across New Zealand suggests that there is more at play than just an Auckland 'halo effect', although that has contributed in the northern regions."

ASB economist Kim Mundy said the housing market is certainly healthy, particularly given the fall in days to sell. But she also did not count the Auckland market out.

On a seasonally adjusted basis, Auckland sales had picked up.

It was too soon to say whether the pick-up would be sustained.

Northland was the strongest real estate market in the country: sales were up 39 per cent and prices up 20 per cent on a year ago.

Agents reported a surge in demand for coastal properties, and houses on the market had dropped "significantly," Milne said.

Waikato/Bay of Plenty was the next busiest region in December, with sales up 30 per cent on a year ago and prices up 11 per cent.

Gisborne, Rotorua and Taupo were all particularly active, and there were signs that first-home buyers were now striking competition, according to REINZ regional director, Philip Searle.

"Aucklanders continue to feature strongly across the region, particularly in Hamilton and Tauranga," he said.

In Hawkes Bay prices were up 13.3 per cent, hitting a new median high, and sales were up 26.3 per cent, as demand rose across the price range.

Both the Taranaki and Manawatu markets saw large lifts in sales, but prices were more moderate, up 1.1 and 4.3 per cent respectively.

In Wellington, sales rose 18.4 per cent, a welcome sign that the Capital's flat market was coming back to life. Prices were up 5.1 per cent, hitting a new high of $436,000.

REINZ's Wellington director Euon Murrell said that although sales dipped in December, the market was still strong and there was "plenty of activity from all buyers groups".

After a strong few years, Canterbury/Westland prices were up a respectable 5.3 per cent for the year but prices were flat, as first-time buyers held out for a better deal in the New Year.

But further south, the housing market was chugging along nicely.

Central Otago Lakes had the highest annual increase in the country, with prices up 20.4 per cent, while Southland's prices rose 13.9 per cent and Otago's rose 11.7 per cent.

Sales in all three regions were strong, particularly with first-time buyers in Otago, and a shortage of listings in Central Otago. Most of the sales growth in Central Otago was coming from other parts of the region not Queenstown, Milne added.

 Elton Rikihana Smallman - Stuff

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