November was a huge month across New Zealand with the Real Estate Institute reporting more than 8,000 sales of residential property. That figure is 8.5 per cent higher than November last year and 2.7 per cent higher than October’s figure.
The institute says the national median price was $459,500 for November, an increase of $3,750 on November 2014. However, if you strip out Auckland from the figure, the national median price falls to $375,000.
Colleen Milne, the institute’s CEO says the Auckland market continues to be challenged by a lack of supply which is evident in the low number of sales for November. During the month 2,514 properties sold across the region, in October the figure was 2,546, and in November last year it was 2,947. Auckland’s median property price is $765,000 (October $748,250)
As with many property commentators, Milne says the market has slowed while property investors get to grips with the new property purchase rules for investors and off-shore buyers.
Last week, as widely predicted – and forecast both here and in my weekly Property Podcast – the Reserve Bank lowered the official cash rate on December 10 to 2.5 per cent. The banks were clearly expecting the cut and some reduced their floating mortgage rates within an hour of last week’s announcement by Graeme Wheeler.
The rate is now back to where it was in 2009, when the GFC was biting hard. Wheeler is clearly worried about the low rate of inflation in New Zealand, because one doesn’t need rates this low to support house buyers or business owners.
Inflation is currently sitting at a pitiful 0.4 per cent, the target set by the government is between 1 and 3 per cent. So will the cut lead to a boost in economic growth? Will we go out buying more because floating mortgages are a fraction cheaper than a month ago? I don’t think so. But if it helps us avoid a recession then I’m all for it.
As for Auckland housing…Nothing has changed. There are still more buyers than sellers, and first-time home buyers in Auckland are still not being catered for.
And if you are looking to buy in the regions, my 2 cents is to get in while you can. Wheeler may well start applying Auckland’s 30 per cent deposit rule across the country some time next year.