Residential markets hold firm
The residential real estate market has held firm in the past month with prices and turnover in July closely tracking June’s figures, according to the latest statistics released by the Real Estate Institute of New Zealand (REINZ).
For the first time, the Institute’s data is accompanied by the REINZ Monthly Housing Price Index, a new stratified housing price measure which gives an average of sale prices for common groups.
Institute president Mike Elford says that the Index, which was developed in conjunction with the Reserve Bank of New Zealand, will give an even more accurate analysis of house price movements at different price brackets and therefore a more comprehensive overall picture.
“The better data we have, the more credible the information.”
July’s median house price of $340,000 is the same as June 2009 and also identical to July 2008.
It is just marginally down on the $345,000 in July 2007 and well up on the median prices for the years 2000 through to 2006, which ranged between medians of $170,000 to $312,500.
Volumes have been similar too with 6,014 properties sold nationally in July 2009 compared with 6,040 in June. This figure is well up on the 4,489 sold in July 2008.
“The market has certainly recovered well from the lows of mid-2008,” Mr Elford says.
“You wouldn’t call it brilliant, but there are positive signs such as more listing stock.”
There were no significant shifts in the numbers of homes sold regionally, although the Wellington market was a little sluggish with 618 sales in July 2009 compared with 674 in June 2009. Manawatu / Wanganui by comparison increased sales from 300 to 328 in the same period.
Another positive sign of recovery is the length of time to sell a property.
In July 2009, the median number of days to sell a house nationally was 37.
This compares with 58 days in the corresponding period in 2008. The figure for June 2009 was 41.
The number of days dropped sharply in Southland from 49 days in June to 35 days in July.
Northland dropped from 72 to 51, Waikato / Bay of Plenty from 56 to 47 and Otago from 55 to 40.
Individual markets have their own stories to tell.
Mr Elford says the 4.51 per cent increase in median house prices for July 2008 to July 2009 in Auckland (from $421,000 to $440,000) is a sign of an improving market.
There was significant growth in Southland with a 10.46 per cent jump from a median house price of $172,000 in July 2008 to $190,000 in July 2009.
A good increase was also seen in Taranaki, which rose 5.69 per cent from July 2008 to July 2009 with median house prices going from $265,000 to $280,100 – a sign of regional business confidence, Mr Elford says.
Bucking the positive trend was the Central Otago Lakes district, which fell from a median of $565,000 in July 2008 to $411,000 on July 2009 – a drop of 27.25 per cent.
“This is probably a flow on from the international economic markets”, Mr Elford said.
“Foreign investors tend to liquidate property investments in Queenstown as a result of the global recession.”
From a price band point of view, there has also been little movement from June to July.
Around the same numbers of homes sold in the under $400,000, $400,000 to $599,000, and $600,000 to $999,999 brackets but there was a small slump in the $1 million + segment from 161 homes sold in June to 125 in July.
This is still a better performance than July 2008 when just 109 properties over $1 million were sold.
Mr Elford believes the consolidation seen in the market over the past few months will continue with more stock being listed.
“I think we’ll see some improvements with the seasonal adjustment going into the spring months,” he said.