If you wanted capital gains on your house over the past year, forget the big city – the best place to be was Manawatu/Whanganui.
The Real Estate Institute has released its latest data, which shows five regions hit record median prices last month.
Manawatu/Whanganui was up 20.2 per cent year-on-year from a median $286,250 this time last year, to $344,000.
Otago also hit a record with an 18.2 per cent price rise compared to October 2017. Hawke’s Bay recorded a 17.4 per cent increase, Taranaki lifted 8.6 per cent, and the usually stagnant Christchurch market was up 3.3 per cent. By contrast, Auckland’s median house price was only up 1.8 per cent year-on-year, or 0.4 per cent once seasonally adjusted, to $865,000.
But while the regions are where the activity is at present, that pattern will need to continue for some time to catch up with the gains handed to Auckland property owners in recent years.
In January 2013, Auckland’s median price was $510,000 compared to Manawatu’s $219,000.
Since then, Manawatu has added $125,000 to median prices. Auckland’s have grown $355,000.
ASB economists said they expected regional growth to slow.
“Over the medium term, we continue to expect house price growth to moderate as regional house price growth converges with a flat Auckland housing market. However, the recent fall in mortgage rates does point to the chance of a short-term lift in demand.”
There were 6791 properties sold nationwide in October, the highest in five months.
In Auckland, the number sold increased 15.2 per cent year-on-year to 1948. Sales were particularly strong in Northland, Gisborne and Wellington.
“Regionally, we saw increased sales volumes in 13 out of 16 regions with 10 of those 13 regions seeing double digit increases,” chief executive Bindi Norwell said.
“But the standout results belong to the South Island with the highest volume growth seen in the southern half of the country – particularly in Marlborough which saw a 46.2 per cent increase when compared to the same time last year, which is a significant increase.
“October also saw the introduction of the foreign buyer ban and while there have been pockets around the country of people talking about a rush ahead of the ban, with Statistics New Zealand’s September quarter figures showing the lowest level of foreign buyers since they began keeping records, we’re confident that most of October’s lift in volume is attributable to the spring lift rather than a rush of foreign buyers looking to get in ahead of the ban.”
Norwell said it seemed New Zealand was not following the example of a falling Australian mark.
“September was very quiet in terms of the number of properties sold and we predicted that with the increase in listings coming to the market that October’s sales would be much stronger than September’s.
“With strong sales this month, it’s our belief that in the current market that New Zealand is taking a different path to what we’re seeing across the Tasman at this point in time.”
It comes as data from CoreLogic shows property investors were active in October.
People who own more than one property were responsible for 38 per cent of property transactions in the month, the highest percentage recorded in 2018.
Analyst Kelvin Davidson said that continued despite the introduction of an increasing number of regulations for the sector, including moves to improve tenant rights, extending the brightline test for capital gains, looming ring-fencing of losses and Healthy Homes standards.
He said it could be because they had few alternatives, with term deposit rates so low.
“As BNZ chief economist Tony Alexander pointed out, the extra measures and costs don’t scupper an investment plan altogether, they just mean that the landlord will probably now have to hold on to properties for another year or two to achieve the return they wanted.”