House prices were up 5.82% y-o-y in Q3 2019

New Zealand’s house prices continue to rise, despite the introduction of a new regulation that bans non-resident foreigners from buying existing homes in the country. Median house prices rose by 5.82% (inflation-adjusted) during the year to Q3 2019, following y-o-y rises of 2.74% in Q2 2019 and 8.76% in Q1 2019 and a decline of 0.07% in Q4 2018. In a quarterly basis, real house prices increased 1.36% in Q3 2019.

Demand and supply are both falling

The number of dwellings sold in New Zealand fell by 4% y-o-y to 6,801 units in October 2019, according to the Real Estate Institute of New Zealand (REINZ). In Auckland, dwellings sold fell slightly by 0.1% y-o-y to 2,025 units over the same period. Nationwide, the number of days-on-market fell by a day to 34 days in October 2019 from a year ago.

The number of properties available for sale in New Zealand fell by 13.1% y-o-y to 22,313 units in October 2019. All fifteen regions registered an annual decline in total inventory levels.

Rents, rental yields: Good yields at 5.48%

Apartment costs in Auckland are around $7,209 per sq. m. 

New Zealand: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Auckland $412,571 $1,885 5.48%

Recent news: For the last five years, NZ economy’s performance has been the strongest since 2007, with growth of 3% in both 2017 and 2018, 4.1% in 2016, 4.2% in 2015 and 3.2% in 2014. The economy is projected to grow further by 2.5% this year and by another 2.7% in 2020.

In November 2019, the Reserve Bank of New Zealand (RBNZ) held the Official Cash Rate (OCR) unchanged at a historic low of 1.0%, following rate cuts of 50 basis point in August 2019 and 25 basis point in May 2019, in an effort to buoy the economy and promote sustainable employment.