The latest property sales data released by the Real Estate Institute yesterday highlighted the easing of property prices in May. The national median price of all properties sold in the month was $350,000 down from $360,000 in April. A year ago the median price was $350,000, 2 years ago in May 2009 it was $337,500.
The median price is the midpoint price of all sales in the month; whilst a consistently trusted measure of the market price for property it can be influenced if the composition of the properties sold skews heavily towards high end or the low end of the market. For this reason REINZ developed in association with The Reserve Bank the Stratified House Price Index which applies a modeling technique which ensure that the composition (price ranges) of property sales does not skew price data – effectively ensuring that the index reflects the true value of property sales on a “like-for-like” basis.
The Stratified price for properties sold in May across the country was $358,925 down from $365,593 in April, a fall of 1.8%. A year ago the stratified price was $361,610 (down 0.7%), 2 years ago in May 2009 it was $353,425 (a rise of 1.6%).
So by this measure properties values seem to be pretty static with a small degree of long term rise. However to gain a true picture of property prices and values you need to see the picture of the trend over the longer term.
The chart below shows the stratified price for property sales across the whole country covering the period since 2007. The chart shows that over the past 18 months since late 2009 prices have definitely eased.
Current price of property sales prices remain 5.8% below the peak of property prices which was over 3½ years ago. The bottom of the recent property cycle was over 2 years ago in January 2009 when prices dropped to $337,400, the current price is 6.4% up from that point.
Out of interest casting the data back over the past 2 decades ably reminds of us of the history of the NZ property market as shown below!
The stratified price data is provided for each of the main metropolitan areas (Auckland, Wellington and Christchurch) as well as the North Island and South Island aggregate of property sales outside of the main metropolitan areas. The detailed paired charts below highlight these 5 regions for both recent property prices as well as long term.
North Island excluding Auckland and Wellington
South Island excluding Christchurch