House Prices May 2018
In May a new NZ median house price was recorded at $562,000 which represented a 5.0% increase on the price in May 2017. Of the 16 regions in New Zealand, 13 saw price increases. Only Auckland, Gisborne and Southland saw a decrease in prices compared to 12 months ago. Despite the year on year price decrease in Auckland the market this year is slowly moving up with prices up $2,000 compared to prices last month.
The Real Estate Institute of New Zealand have a House Price Index (HPI) figure which shows that the HPI for Auckland year on year is actually up 0.6%. This suggests that the negative year on year Auckland median price is a result of a few $1,000,000 sales dragging down the median figure.
What does all this mean? In simple terms property prices continue to increase almost everywhere in NZ and that is a simple supply Vs demand situation. When supply is lower than demand prices increase. As we all know there is a housing shortage and still a strong buyer demand.
Just like this season there was a smaller Avocado harvest than last year. Demand for Avocados did not fall so growers are able to sell Avocados in some instances at $5.00 each! In terms of number of properties sold that was up 1.3% across NZ compared to May 2017. In Auckland sales were up 5.4% compared to May 2017.
Largest sale increases year on year were:
Nelson – up 25.3%
West Coast – up 20.9%
Gisborne – up 15.8%
Hawkes Bay – up 12.5%
The picture is one of a confident housing market with a high probability of future price increases but at a gradual rate as opposed to the very rapid price increases in 2016.
Double Glazing, does it pay?
Most houses in New Zealand have single glazed windows meaning that each window has a single sheet of glass. Double glazing means each window has 2 sheets of glass with a sealed gap between the 2 sheets or panels. The gap can be either an air gap or a heavy inert gas such as Argon.
The gas or air acts as a thermal barrier reducing the transmission of heat. Argon is more effective than air by 3-9% but it costs more to install. The type of glass used can also improve the thermal heat loss through a window.
How does double glazing help?
Low E glass (low emissivity) can reduce heat loss by 20-30% compared to the standard window glass. Since 2008 all new houses built have to be built using double glazing. When major renovations to an existing house is undertaken where a building permit is required any replacement or new windows would need to be double glazed.
Existing houses can however have their windows retrofitted to change them from single glazed to double glazed without removing the existing windows. But does the cost of replacing or retrofitting existing windows pay in terms of saving on heating bills?
Research done by Energywise and Victoria University generally agree that the pay back time to recoup the cost can vary depending upon what part of the country (how cold it gets) and whether it is retrofit or replaced. Typical figures for Auckland are 28-30 years, typical figures for Dunedin are 13-15 years.
The other benefits of double glazing apart from the power bill savings are obviously a more comfortable home, less condensation on the windows and noise reduction. Finally the re-sale value of a house that has double glazing is likely to be higher than if it had single glazing.
Does it pay? Yes, but usually as a long term investment.