The OCR was held at 1.75% from November 2016 until May 2019 when it was reduced by a further 25 basis points to 1.50%.
Retail Sales in New Zealand increased 5.40 percent in the fourth quarter of 2017 over the same quarter in the previous year. Retail Sales YoY in New Zealand averaged 3.63 percent from 1996 until 2017, reaching an all-time high of 10.80 percent in the first quarter of 2004 and a record low of -7.90 percent in the first quarter of 2009.
The 2018 year to date has seen an increase in the total number of sales compared with the same periods in 2017 and 2016.
Median sale price for February 2018 was $510,250 which is a 14% increase compared to February 2017. The average median over the last 12 months was $487,000 but 12 months prior to this it was $442,000. This indicates the average median sale price has increased over the long term.
The average time to sell in October was 27 days with the average for the last 3 months of 26 days. The 12- month average is 28 days. This indicates the pace of the market has slowed marginally with a reduction in demand leading to longer marketing periods.
Median sale price for November 2017 was $503,500 which is a 4% increase compared to November 2016. The average median over the last 12 months was $479,000 but 12 months prior to this it was $428,000. This indicates the average median sale price has increased over the long term.
Generally, the 2017 year saw a decrease in the total number of sales compared with 2016 and 2015, except for the Nelson Country areas that saw an increase.
The Reserve Bank (RBNZ) continues to manipulate the Official Cash Rate intending to control the market and monitor inflation. With earlier inflation running below 1.00%, the Official Cash Rate (OCR) was lowered in November 2016 by 25 basis points to 1.75% with the intention of increasing economic activity and achieving the Reserve Bank’s inflation targets.
The average time to sell in June was 33 days with the average for the last 3 months of 32 days. The 12-month average is 28 days. This indicates the pace of the market has slowed slightly with a reduction in demand leading to longer marketing periods.
The key drivers of population growth through migration, low interest rates, stable economy and low unemployment still combine to underpin the market creating a stable economic climate. Prospective purchasers must make quicker decisions when buying a property especially in the lower price bracket. Vendors who are prepared to meet the market are achieving successful sales.