REINZ: Auckland house prices record their strongest annual rise of the year in May. Another shift in government housing policy!

 The Real Estate Institute of New Zealand (REINZ) today released its property sales figures for May.

 

Buoyed by the abandonment of capital gains tax and a Reserve Bank of New Zealand interest rate cut, Auckland house prices recorded a rare year-on-year increase.

 

In May, New Zealand's national median house price was NZ$578,000, up 3.2% on the same period last year.

 

Auckland's median house price was $860,000, up 1.2% year on year. This was the city's strongest annual increase in the median price so far this year.

 

 

However, it is still too early to conclude that Auckland's housing market is recovering. Residential sales volumes fell markedly from the same period last year, both nationally and in Auckland.

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Nationwide, 7263 homes were sold in May, down 7.8% on the same period last year.

 

Auckland recorded 1925 home sales in May this year, a steep fall of 21.8% from last year's 2462.

 

A recovery in Auckland's housing market can only be confirmed when both sales volumes and prices rise.

 

  

West Auckland's median house price in May this year was $790,000, up 6% year on year—the strongest increase in 5 months. Central Auckland's median house price in May this year was $976,000, up 3.8% year on year, the strongest result in 3 months. 

 

Finally, with the KiwiBuild housing programme on the brink of collapse, government housing policy has taken another turn: shifting its focus from helping first-home buyers purchase homes to accepting the reality that most people can only rent long term.

 

Housing Minister Phil Twyford told Parliament on Wednesday that he was considering a 'build-to-rent' programme to ease pressure on the rental market.

 

Phil Twyford

 

As the name suggests, 'build-to-rent' means building homes to rent out rather than sell. The concept has been tried for many years in countries including the United Kingdom and Australia.

 

Housing Minister Phil Twyford said he had sought advice on how to help developers build these rental homes. Incentives under consideration include deferring payment for land: Crown land would be transferred first, with developers paying for it gradually after completing and renting out the homes.

 

He also said that similar programmes already existed in the United Kingdom and Australia, where some investors had secured stable, long-term returns.

 

 

KiwiBuild has essentially failed. Let's hope build-to-rent succeeds!