Residential Real Estate Market Spikes

FOR IMMEDIATE RELEASE

News Release 9 April 2009

Residential Real Estate Market Spikes

March sales figures released today by the Real Estate Institute of New Zealand (REINZ) reveal a spike in terms of sales volume.

However, Institute president Mike Elford said while the figures in terms of sales volumes, prices and days to sell are cause for “cautious optimism” it is too early to predict recovery.

“We need to read the figures in the context of December, January and February figures being light months in terms of volume. And while there is certainly a significant return to healthier numbers, we also need to be mindful we are now coming into a period of seasonal drop off in sales.”

Nevertheless, Mr Elford said, the total number of homes sold nationwide in March – 6,694, up from 5,228 in February and from 5,129 in March 2008 – is consistent with the information he’s been receiving from the industry around the country.

“I’m hearing that March was the best month for some time with properties available for sale and genuine buyers and sellers ready to meet market prices.”

The median price for homes across New Zealand at $335,000 for March 2009 is slightly up on February’s $330,000 and on a par with the March figure from 2007 of $343,500 but down on the comparable period in March 2008, $349,000, equivalent to 4.01 per cent

With the exception of Taranaki and Nelson/Marlborough, which rose by 1.77 per cent and 1.58 per cent respectively, and Manawatu/Wanganui which remained the same, prices dropped in all districts from between 0.57 per cent in Auckland through to 9.37 per cent in the Central Otago Lakes District in March 2009 compared with March 2008.

The news in turnover is brighter with total March sales of 6,694 properties compared with 5,129 properties in March 2008. However, these figures are well down on the five-figure turnovers of the same period in 2003 through to 2007.
March property sales in Auckland were well up on February figures (2,190 up from 1,590), and in Canterbury/Westland (from 815 to 1090). The only district to see a drop in number of sales from February to March was Manawatu/Wanganui from 308 to 283.

“The indications are that there is renewed interest in the real estate market stimulated by the drop in interest rates and the affordability of properties,” Mr Elford said. “We’re seeing investors back too, moving away from equities and returning to controlled investments such as real estate.”

Of interest in this month’s figures is the weighting of property sales in the under $400,000 price band – 4,260 of the total sales of 6,694, followed by 1,623 sales in the $400,000 to $599,000. There were 163 sales of properties $1 million and over – nearly half the number that sold in the same period in 2007 (368) although this was from a total of 10,989 sales.

“It’s not too surprising the top end of the market is a little slow, but as a proportion of total sales, we’re still seeing good movement and we’d expect this to continue as the market settles,” Mr Elford said.

ENDS

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