Whilst Auckland continues to experience a flat property market, the rest of NZ keeps trucking on, although there are signs that the party may now be coming to a close. It’s been a very long party. As the rest of the country has tried to keep up with the Auckland market, the rest of New Zealand has managed to keep going long after Auckland ran out of energy and exited the party.
It’s quite staggering that the median price of properties sold outside of Auckland has been rising consistently for over 7 years straight, that’s 90 consecutive months of price increase. It was back in November 2011 that prices started to edge upward after the GFC and the likelihood that this run will head into its 9th straight year is high.
The last 3 months has seen sales volumes across the country outside of Auckland fall by 6% as compared to the same time last year at just under 13,000 sales. On an annual moving total basis the picture as displayed in the chart below shows that sales volumes are coming off the boil at 54,539.
Total sales for the month of March at 4,932 was down 11% as compared to March last year and this represents the 4th consecutive month with declining sales volumes compared to prior year. The chart below tracks the cycles of these sales volume movements over the past 20 years. The regularity of the pendulum-like rise and falls is certainly evident. The likely trend in the coming months is for sales volumes to continue to weaken.
The latest median price of property sales outside of Auckland continues to edge ever closer to the half a million dollar mark. Interestingly this half million dollar mark is fair more likely to be broken some time soon, and certainly well ahead of the much anticipated million dollar mark expected to be broken by Auckland two or three years ago but stubbornly failed up until now. In March the medan sale price for properties outside of Auckland was $491,000 up 7% as compared to the same month last year.
As noted earlier this year-on-year rise follows a consistent increase unbroken over the past 92 months since way back in August 2011 when the median sale price for property outside of Auckland stood at $304,500. That unbroken run has seen median price rise 61%.
Just as the latest quarterly report for the Auckland market is showing some signs of recovery when examining the clearance rate, so it is with the rest of the country, except that the trend is the opposite.
The first 3 months of 2019 has seen the clearance rate (the lead-indicator of sales to listings ratio) begin to fall, having peaked in November last year at 73%. As the correlation between clearance rate and median price movement is fairly close, it is likely that the future increases in median price for property sales outside of Auckland will continue to slow. However given the strength and consistency of the price increases over this extended period it is not likely that actual median prices will fall anytime soon based on historical trend analysis.