Activity in the regions continues to show the influence of the halo effect with new record median prices reached in Hawke’s Bay and Taranaki as first home buyers are drawn to these regions, keen to make the most of low interest rates boosting their purchasing capacity.
Hawke’s Bay and Taranaki both reached new record median prices in January, with Canterbury/Westland hitting the record median price first reached in April 2015, according to Real Estate Institute of New Zealand (REINZ) findings.
Waikato/Bay of Plenty recorded the largest percentage increase in median price compared to January 2015, at 12.9%, followed by Otago at 12.0% and Hawke’s Bay at 11.8%.
Looking at regional sales volumes, 10 regions recorded increases in sales volumes compared to January 2015, with Hawke’s Bay recording the largest increase of 36%, followed by Northland 31% and Waikato/Bay of Plenty 27%.
Property sales are up 4.3% (5,048 sales) year on year in January 2016 with the national median price at $448,000 for January, an increase of $22,000 or 5.2% on January 2015, but down 3.7% compared to December.
Real Estate Institute of New Zealand (REINZ) chief executive Colleen Milne says, "Northland continues to see rising sales volumes and price growth as it benefits from the Auckland 'halo' effect. Levels of inventory are continuing to fall, which is reducing choice for buyers and encouraging vendors to lift their price expectations."
REINZ regional director, Philip Searle noted that "The Hamilton and Tauranga markets are continuing to see strong interest from Auckland based buyers with both first home buyers and investors active in the market.
"Smaller towns such as Rotorua, Gisborne and Taupo are also seeing increased demand from Aucklanders, while demand is strong in Eastern Bay of Plenty also. Listings remain in very short supply with the market being characterized as being 'hand to mouth' with new listings being sold very quickly."
Century 21 New Zealand
National Manager Geoff Barnett
said much of the grassroots excitement in property is now happening beyond Auckland.
“Don’t worry about Auckland slowing down a bit, the real story here is the number of regions rocketing over the past 12 months in both price and sheer sales,” he said.
“The latest REINZ January statistics released today tell only one real story and that is many of New Zealand’s regions are experiencing a significant lift in both real estate sale prices and sale volumes.”
“For once these latest numbers are not about Auckland. Rather what we’re seeing is the likes of Hawkes Bay and Taranaki breaking new records on median prices, with others not far behind,” said Barnett.
“As they say, this is the halo effect in action as first home buyers in the regions make the most of low interest rates. At the same time families and retirees are moving to shrink their mortgages and for lifestyle reasons.”