Houses for sale at chronic lev­els

Manawatu Standard - Property Weekly - - Front Page - He­len Mays

Me­dian house prices and sales vol­umes reached new record highs across more re­gions of New Zealand than ever be­fore, ac­cord­ing to the lat­est fig­ures re­leased by REINZ.

Waikato/Bay of Plenty, Taranaki, Can­ter­bury/West­land and Otago had record me­dian house prices in April, proof of the grow­ing ‘halo ef­fect’ of ris­ing prices around New Zealand. Those ar­eas al­ready ex­pe­ri­enc­ing hous­ing short­ages and ris­ing prices saw their prob­lem deepen.

Mean­while, new re­gions felt the halo ef­fect of in­vestors look­ing for a se­cure re­turn on their cap­i­tal.

The num­ber of dwellings sold in April 2016 rose by 12.8 per cent com­pared to March, and com­pared to April 2015, all re­gions recorded in­creases in sales vol­ume.

To make mat­ters worse, the avail­abil­ity of prop­er­ties for sale has fallen by over one third over the past 12 months, with a num­ber of re­gions see­ing de­clines of more than half. Days to sell, an­other mea­sure of de­mand, has also fallen by more than 20 per cent over the past 12 months in nine of the 12 re­gions.

‘‘For fi­nance ap­proved first home buy­ers it’s an ex­cel­lent time to be search­ing as mort­gage in­ter­est rates are so low,’’ says Andy Ste­wart, lo­cal spokesper­son for REINZ. ‘‘They have to move quickly as so often there are mul­ti­ple of­fers af­ter the first open home.

‘‘We’ve seen re­cent houses with sig­nif­i­cant im­prove­ments sell for as much as 40-50 per cent above Rate­able Value,’’ says Andy, ‘‘Re­mem­ber­ing that RV is a mea­sure for rates, not cur­rent house value.’’ Andy says there are strong num­bers ar­riv­ing at open homes and most homes have an un­con­di­tional sales agree­ment in two to three weeks, with back up of­fers in place.

War­ren McGrath, sales man­ager at The Pro­fes­sion­als, says he knows of one house in the $200,000 to $300,000 range that had 17 of­fers on it. ‘‘We need 100 houses ex­tra per month at least to meet the cur­rent de­mand for houses be­cause they’re sell­ing quickly and the hous­ing stock needs to be re­freshed,’’ con­firms Andy.

The na­tional me­dian price was $490,000 for April, an in­crease of $35,000 on April 2015. Ex­clud­ing the im­pact of the Auck­land re­gion, the na­tional me­dian price rose $29,000 to $382,000 com­pared to April 2015.

REINZ Chief Ex­ec­u­tive Colleen Milne says the April data con­firms the con­tin­ued strength of the real es­tate mar­ket right across New Zealand, driven by a chronic lack of sup­ply.

There were 8568 un­con­di­tional res­i­den­tial sales in April, an 18.4 per cent in­crease on April 2015.

Sales vol­umes, ex­clud­ing Auck­land, were up 28.8 per cent on April 2015. All re­gions, apart from North­land, Auck­land and Taranaki are show­ing in ex­cess of 20 per cent an­nual sales growth. Auck­land saw the num­ber of sales in­crease by 1.7 per cent com­pared to April 2015, the first an­nual in­crease in Auck­land’s sales vol­ume since Oc­to­ber 2015.

Com­pared to April 2015, all re­gions recorded in­creases in sales vol­ume, with Hawke’s Bay record­ing the largest in­crease of 50 per cent, fol­lowed by South­land with 49 per cent and Otago with 35 per cent.

The na­tional me­dian house price rose $35,000 to $490,000 from April 2015 to April 2016. Ex­clud­ing the Auck­land re­gion, the na­tional me­dian price rose $29,000 com­pared to April 2015.

At the same time, the avail­abil­ity of prop­er­ties for sale has fallen by over one third over the past 12 months.

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