April a boomer month for house sales

The property market is expected to slow over the second half of this year, but economists are not expecting a sharp drop as it resists Government attempts to slow it down.

House sale figures out yesterday show the real estate market was still piping hot last month, the busiest April in five years.

The national median house price was also up 19.1 per cent on a year ago to $810,000, according to the Real Estate Institute.

But the institute’s acting chief executive, Wendy Alexander, said while the national picture represents great busyness, ‘‘the reality is that we’ve seen the number of sales decrease when compared with March’’.

While this was expected as winter approached, she said there were definite signs people were taking a ‘‘wait and see approach’’ after recent changes to lending and the tax treatment of residential property investors.

‘‘We have seen some regions start to show signs of prices easing and the rate of growth slowing down a little, which will be welcome news to those looking to get on the property market,’’ Alexander said.

‘‘Additionally, it might be the first signs that the reintroduction of the LVRS [loan to value ratios] is starting to have the desired effect.’’

However, economists felt REINZ’S concerns were overstated.

Westpac senior economist Michael Gordon said the market seemed ‘‘perky’’ and did not offer much evidence yet of a cooling market. And ASB senior economist Jane Turner said it would have been surprising ‘‘not to see some deceleration’’ in the market.

‘‘After all, there’s been a lot thrown at the high-flying property market in the past couple of months.

‘‘Still, we reiterate our view that a hard landing for the housing market is unlikely.

‘‘The April falls in house sales were probably overstated to some degree by the past few months’ rush by buyers to beat various policy changes.

‘‘And looking through some of the other data on offer shows the market is still very tight.’’

Kiwibank senior economist Jeremy Couchman said the latest data provided ‘‘limited evidence’’ that the policy changes were taking the heat out of the market so far, but he was expecting prices to cool from the second half of the year.

Apart from the policy changes, more housing was coming to the market. Building consents were at a record high and closed borders had limited population growth.

‘‘The construction industry is currently building a surplus of homes for the first time in almost decade. A surplus of homes will likely be repeated this year and next.’’

Some 7218 properties were sold across the country in April but Alexander said comparisons with last April would be distorted since last year’s lockdown had curbed house sales dramatically.

At $810,000, the national median price was slightly lower than March’s record $826,300, but continued to be supported by a chronically low level of inventory.