New Zealand's housing market was the second best performer after China in the Global Property Guide’s latest survey, with the average price of a house in the country increasing by 10.43% during the year to Q2 2016, sharply up from a y-o-y increase of 5.19% during the same period last year. New Zealand prices rose by 0.58% quarter-on-quarter during Q2 2016.
Total dwellings sold were 7,299 units in July 2016, down by 10% from a year earlier, according to the Real Estate Institute of New Zealand (REINZ). Sales volumes declined in most of New Zealand's ten regions, with Auckland registering the biggest y-o-y drop of 20.3% in July 2016, followed by Waikato/BOP (14.4%). The decline in sales can be mainly attributed to a shortage of housing inventory, with a 33% y-o-y decline in properties available for sale in July 2016 (six regions had housing inventory declines of over 40%).
New dwelling consents rose by 13.1% to 16,833 units in the first seven months of 2016 from the same period last year, according to Statistics New Zealand. Consents for new houses, which increased by almost 17% over the same period, accounted for 72% of all dwelling consents.
New Zealand's economy is projected to expand by just 2% this year, after growing by 3.4% in 2015, 3% in 2014, and 1.7% in 2013, according to the IMF. The Reserve Bank of New Zealand (RBNZ) reduced its official cash rate (OCR) by 25 basis points to 2% in August 2016, after cutting it five times in the past 14 months, in an effort to boost economic growth amidst low inflation.
For the latest detailed housing market analysis of individual regions and countries, check out the Global Property Guide's global survey for Q2 2016.