Residential Market ‘Steady As She Goes’

Residential Market ‘Steady As She Goes’

The seasonal downturn expected in the residential real estate market during the middle winter months has not been as marked as expected, with median prices and days to sell properties during June on a par with May figures according to statistics released by the Real Estate Institute of New Zealand (REINZ) today.

‘In fact, there has been a slight rise in median prices,’ says REINZ president Mike Elford. ‘The rise from $337,000 in May to $340,000 in June puts us exactly where we were in June last year, and it’s good to see the median time taken to sell properties has moved from the 53 days we saw in June 08 to 41 days last month.’

Disappointingly, the turnover in June, however, dropped from 6,291 in May to 6,040 in June. Mr Elford says the reason for this is not that people are not buying properties but rather that the properties are not coming on the market. As noted, last month, people are sitting tight on their properties, both because people tend not to move house in cold weather and because of their continued uncertainty around where the market is heading.

The fastest turnaround for houses in New Zealand in June was in Auckland at 33 days compared with 37 days in May; in Taranaki at 31 days compared with 46 in May and in Canterbury / Westland at 37 days compared with 43 in May. The greatest improvement in movement was in Central Otago Lakes district where the length of time to sell a home moved from 52 days in June compared with 85 days in May. Sales in Otago and Southland were slower in June: from 34 days in May to 55 days in June for Otago and 37 days to 49 days in Southland.

‘The overall faster time to sell shows that the buyers are out there, and the prices being paid show the money is there, but there’s still a reluctance on many people’s part to put their home on the market in what they perceive as a buyer’s market,’ Mr Elford says. ‘Shortage of stock remains the biggest issue facing the industry at the moment.’

And yet, he says, in seven out of 12 districts, median prices have risen and apart from the Central Otago Lakes district, where prices dropped 14.64 percent, falls were negligible.

Prices in Northland rose by 2.39 percent in June 2009 compared with June 2008. In Waikato they were up .87 percent, in Hawkes Bay 7.27 percent, in Manawatu / Wanganui 3.74 percent, in Taranaki 6.27 percent, in Wellington 2.31 percent and in Southland 6.02 percent. In addition to Central Otago Lakes, prices fell in Nelson / Marlborough by 0.29 percent, in Canterbury / Westland by 1.33 percent and Otago by 2.60 percent. Prices were unchanged in Auckland.

The volume of sales is slightly down on last month’s totals across the country, most noticeably in Canterbury / Westland, where the drop has been from 955 to 889 and in Nelson / Marlborough dropping from 252 to 197. Despite the blanket fall, the 6,040 sales total in June is still considerably up on the 4,305 sales recorded in June 2008. A graph of national sales trends for the past 12 months clearly shows prices steady over the past year, and the number of sales remaining steady from March when they rose sharply from a low in January.

Otago bucked the trend by increasing the number of properties sold in June totaling 232 compared with 215 in May.

Looking back over the past few years, Mr Elford notes the number of house sales across the country is on a par this year with the total recorded in June 2001 of 6,098, ‘but median prices at $340,000 are well up on the median of $177,000 we had then’.

The total value of sales nationally in June 2009 was $2,485 million, (down from $2,601 million in May). Of these, $1,073 million worth of sales took place in Auckland, $290 million in Wellington and $311 million in Canterbury / Westland.

Sales of properties in the $1 million+ category fell from 180 in May 2009 to 161 in June 2009. There was a slight decrease in property sales in the $600k - $999,999 bracket from 657 to 635. Properties in the under $400,000 bracket fell from 3,975 to 3,802 and the $400k - $599,999 bands fell from 1479 to 1442 from May to June.

ENDS

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