October was a strong month for the housing market, new data from the Real Estate Institute shows. For more on this, don’t miss our monthly update.

Record prices in many regions

The median house price across New Zealand increased by 8.2% in October to hit $607,500 – a record high. It was the first time the country had recorded a median price above $600,000.

Record prices were reached in Northland, Waikato, Bay of Plenty, Hawke’s Bay, Manawatu/Whanganui and Otago. Meanwhile, Canterbury returned to a record price it reached last October.

Bindi Norwell, chief executive of the Real Estate Institute, said it was a strong month for the property market.

“This the highest number of regional record prices we’ve seen for the country in 23 months,” Norwell said.

“The Gisborne region also had a very strong month with a 37.1% increase in median price year-on-year to $425,000 – the strongest price rise across the country.

“October saw the Auckland region experience the highest median house price in 19 months at $868,000. This was a 0.8% lift on the median price seen last October and a 2.4% lift on the median price from September this year.

“Looking across the Auckland region, Auckland City saw the highest median price in 28 months with a 4.6% annual increase to $1,001,000 – in part due to a 43.0% increase in median price in the Waitemata & Gulf area. This increase was the result of a 6.8% increase in the number of $1 million to $1,999,999 properties sold compared to the same time last year.

“Additionally, Franklin District saw median house prices increase 8.8% to $695,000 the highest median price in four months.”

National sales volumes dropped – and this might be why

Overall, sales volumes were down 12% month-on-month. The number of sales was up 20.2% year-on-year in Bay of Plenty and 19.4% in the Tasman region. In Nelson, sales were up 16.7%. But in Marlborough, turnover was down 28.7% and in Gisborne it dropped 22.8%.

“The number of properties sold across the country fell by -4.0% when compared to the same time last year; but with a number of people aiming to sell their home before the foreign buyer ban came into effect at the end of October 2018, it’s not surprising that the number of properties sold fell when compared to last year,” Norwell said.

“When you add this to the fact that there are around 7,800 fewer listings for the first 10 months of 2019 when compared to the same time last year, it’s no wonder sales volumes are down.”

A sign of recovery? Experts are wary

Economists pointed to the figures as being a sign of a recovery in the market, although Mike Jones at ASB said it would be too much to talk about another “boom”. Listings were still low, particularly in Auckland, he said.

Infometrics said the price jumps being recorded in regional centres seemed to point to a rebalancing of the market, catching up with Auckland, which shot ahead earlier in the decade.

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