House sales, prices rise in May amid early signs Auckland investors looking outside 'big smoke'

To build your own NBR Radio playlist and enjoy instant on-demand access to any audio, sign up for our FREE smartphone-only subscription to NBR ONLINE.

New Zealand house sales and median prices rose in May as Auckland continued to underpin activity, though there are early signs residential investors facing restrictions to borrow money to buy property in the country's biggest city may be looking elsewhere.

The number of houses sold rose 22% to 7989 in May from the same month a year earlier, and the median sale price gained 7% to $460,000, according to the Real Estate Institute. Auckland drove the national figures higher, with a 23% increase in houses sold to 3151, and the median sale price climbing 20% to $625,000. Stripping out Auckland, the national median price rose 2.6% to $349,000 while sales volumes were 21% higher than a year earlier.

"Auckland continues to dominate the real estate market in terms of price movements," Real Estate Institute chief executive Colleen Milne said in a statement. "The inventory situation in Auckland remains very tight and the number of sales by auction continues at near record levels."

Auckland's property market is seen as the primary risk to New Zealand's financial stability by the Reserve Bank, which imposed restrictions on loans to property investors in the city limits, and asked the government to put more rigour in chasing the taxation of capital gains from residential property, both starting in October.

Ms Milne said the Reserve Bank's measures may slow down prices, though it will take several months to come into effect, and could prompt some investors to shift their attention outside Auckland.

"Agencies across the upper North Island, which includes Whangarei through to Bay of Plenty, are reporting increased interest in residential properties from Auckland investors," Milne said.

Northland region sales volumes were up 28% at 222 in May from a year earlier, while the median sale price gained 2.3% to $332,500, while Waikato/Bay of Plenty sales volumes jumped 35% to 1,360, and prices were up 4.2% to $336,000.

Wellington sales gained 22% to 764, while the median price dropped 1.7% to $405,550. Canterbury/Westland sales volumes rose 7% to 945 and prices fell 3.6% to $400,000.

Of the houses sold, 11.7% were in the $1 million-plus bracket, up from 7.2% a year earlier, while 40.5% were below $400,000, down from 44.7% in May 2014.

(BusinessDesk)

To build your own NBR Radio playlist and enjoy instant on-demand access to any audio, sign up for our FREE smartphone-only subscription to NBR ONLINE.