The steam continued to come out of the Auckland property market in January, being the only region to report a drop in house sales and a further slowing in annual price inflation as regulatory curbs dim demand in the country's biggest city and the government continues to free up more land in special housing areas.
The number of houses sold in Auckland fell 14 percent to 1,764 in January from the same month a year earlier, according to Real Estate Institute of New Zealand figures. Across the country, the number of sales rose 4.3 percent to 5,048 in January, and excluding Auckland, that number was up 15 percent as buyer demand spilled over to Northland, Waikato and the Bay of Plenty.
The REINZ figures showed the national median price rose 5.2 percent to $448,000 in January from a year earlier, with new records set in Hawke's Bay and Taranaki. Auckland prices were up 9.1 percent to $720,000 in January from a year earlier, lagging behind gains in Waikato/Bay of Plenty, Hawke's Bay, Central Otago and Otago, which all registered double digit growth on an annual basis.
"Auckland continues to show declining sales numbers. However, the reasons are many and varied, including an increasingly large group of potential sellers who are unable to find suitable new properties," REINZ chief executive Colleen Milne said in a statement. That's "a reflection of the very tight listings position in Auckland and increasingly tight listings across the rest of the country."
Auckland's housing market has been propped up by record inbound migration, while several years of under-investment left a shortage of supply to cope with that increased in demand. That imbalance spurred the Reserve Bank and government to impose curbs to sap investor demand, while at the same time the Crown has been designating certain areas for a fast-tracked consenting process.
• 5,048 dwellings sold in New Zealand in January - down 31 per cent on December and a 5.1 per cent seasonally adjusted fall
• Prices in Auckland fell 7 per cent from December
• National median price of $448,000 down 3.7 per cent on December
• New record national median prices in Hawke's Bay and Taranaki, with Canterbury/Westland equalling its record median set in April 2015.
Housing Minister Nick Smith and Auckland mayor Len Brown today unveiled another group of special housing areas, which they hope will deliver 4,500 more houses to Auckland. The largest of the new zones is set for Upper Orewa, with 2,403 houses and the Tamaki regeneration area in Panmure and Point England with 1,192 homes.
The council and government have announced 120 special housing areas in Auckland, which they hope will yield more than 52,000 new houses, although housing starts in the area are proving slow to materialise.
The Reserve Bank has estimated Auckland has a housing supply shortfall of between 15,000 and 20,000 and needs around 11,000 new consents a year just to match the city's population growth, slightly more than the 9,251 permits issued in calendar 2015.