While investors are shying away from the Dunedin market, in pricier Queenstown they are making the most of the shortage of buyers, data and commentary from the Real Estate Institute of New Zealand shows.
Nationally, the number of properties sold during September fell 26.2% from 7352 to 5428 — the lowest number of properties sold in September for six years.
The median residential property price from sales across New Zealand rose by 1.2% to $525,000; Otago rose 6% to $397,500.Westpac senior economist Michael Gordon said the house price index had risen for the second month in a row, with price stabilisation due to interest rates not rising and the sharp drop in listings, which alleviated the downward pressure on house prices.
"Property owners don’t sell into a falling market if they don’t have to," he said.
Regions with the largest reduction in volumes were Tasman, down 37%, Southland, down 34%, and Auckland, down 31.5%. In Dunedin, the median price rose 16% to $370,000, with sales down 4.9% to 173, while the Queenstown Lakes district median price rose
17.9% to $920,000, with sales down 7.1% to 65 houses.
However, Otago did not make it into the top six provinces, which recorded price gains of between 10% and 19.3%.
The top performers were: Tasman, up 19.3%; Hawke’s Bay, up 18.3%; Gisborne, 14.9%; Northland, 14.4%; Wellington, 10.6%; and Southland, up 10%.
REINZ regional commentator Liz Nidd, of Dunedin, said Dunedin’s "spring rush" had not happened yet, and even once coalition talks were completed and a government was formed, the expected Christmas rise in volumes might not happen until after Christmas; given the short timeframe.
"Investors are scarce, as the 40% deposit is proving to be too much for them.
"First-home buyers are abundant and second- and third-home buyers have very little selection ... stock shortages limit their activity hugely," Mrs Nidd said.
REINZ regional director in Queenstown Gail Hudson said the reality so far in 2017 had been that finance had been more difficult to obtain, but banks were now showing an eagerness to offer loans.
Queenstown was in the hub of New Zealand’s tourism industry and subsequently it was "very buoyant", she said.
"The median price in the area continues to rise, which is generally proving too high for first-time buyers. However, investors now appear to be taking advantage of fewer buyers in the market," Mrs Hudson said.
ASB senior economist Jane Turner said the September housing turnover was "low", likely due to uncertainty about political parties’ housing policies ahead of what was a tight election race.
"One surprise was the resilience in house prices, suggesting falling inventory levels have helped the Auckland housing market rebalance," Mrs Turner said.
