First National New Zealand: Housing boom? Rubbish

First National New Zealand: Housing boom? Rubbish

Descriptions of the New Zealand real estate market having a mini-boom are absolute rubbish, according to First National.

Real Estate Institute statistics out this week show the national median price hit $355,000 last month, a 10-year high.

Bank economists are warning of measures needing to be taken against another housing boom and some commentators are saying it’s a “sellers market.”

First National general manager John Stewart says there is no boom and talk of a sellers market is rubbish.

“There are a few well presented houses in each market sector, suburb and price bracket that people are fighting over but there are fewer houses selling overall. Those not winning the battle for these prime properties are sitting back and waiting for the next "cherry" to pick whereas during boom times they rush off and buy the next best.

“In our experience, and while there is regional variation, most homes are still selling at 10 – 15% less than two years ago and that is not changing as quickly as some commentators have been saying in recent days.

“Perhaps the bank economists are trying to justify interest rate increases.”

"It concerns me that at a time when a new Real Estate Agents Act is about to take precedence [Tuesday], with the driving intent of professionalising the industry, that we are seeing such emotional and ill-informed commentary from supposedly responsible bodies", Stewart added.

"To base a view that real estate is in a "boom" cycle and needs reigning in on such low sales volume and around the results of competition for the precious few well priced and presented properties in each market is unprofessional."

Volumes had not recovered to boom status either, he said.

“Comparing six-monthly averages, First National’s volumes have plateaued at 40% below the peak of 2007, although they are 21% higher than the lows of last year’s slump.

“People are blaming lack of listings for limiting sales but in areas where listings have improved, sales volumes have not always followed indicating many buyers are still wary of committing themselves.”

Houses under $400,000 made up the bulk of sales activity and it was of concern that volumes in this section of the market were in many areas dropping.

With Christmas traditionally a quiet time for the property market, Mr Stewart said vendors holding firm to unreasonably high prices would be disappointed.

ENDS

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