Housing Market Continues to Slide

Housing Market Continues to Slide

The property market worsened in August, according to the latest Mike Pero Mortgages-Infometrics Property Cycle Indicator (PCI).

“The nationwide PCI is now at its lowest in two years,” says Mike Pero Mortgages Chief Executive Shaun Riley.

“There was very little change in house sales activity in August, with sales still 27 per cent lower than they were at the same time last year.

“The median house price rebounded $1,000 after its fall in July, but was up just 0.9 per cent from August 2009,” he says.

The Mike Pero Mortgages-Infometrics Property Cycle Indicator fell to a negative 9.80 in August, from -8.17 in July. The Property Cycle Indicator is a sensitive measure of the housing market and includes three main factors: changes in the number of houses sold; changes in price; and the time taken for houses to sell.

The third measure of the Property Cycle Indicator, the time taken for houses to sell, showed a slight improvement from the previous month.

“Property took an average of 43 days to sell in August, which was up two days from July, but was still nine days longer than in August last year.”

Auckland continued to slip further into negative territory to -10.00 (down from -8.50 in July) and Wellington also lost ground, dropping to a PCI of -887 (from -7.28 in July). Taranaki dropped off slightly with a PCI of -9.75, down from -9.64 in July.

The only place to show an improvement was the South Island’s Otago region, gaining some ground with a PCI of -7.37 in August, up from -8.24 in July. Canterbury/Westland’s PCI dropped further to -7.88 (a decrease from -6.77 in July), as did Nelson/Marlborough’s, with a PCI of -7.41 (from -5.81).

Rents in August were up 3.4 per cent on a year ago, in line with the annual growth recorded since about February this year.

Floating mortgage rates rose 20 basis points to 6.45 per cent, following the Reserve Bank’s increase of the Official Cash Rate (OCR) in late July But the prospect of slower OCR increases in coming months saw fixed mortgage rates fall again, as much as 30 basis points in the case of the two-year rate.

ENDS

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