De­mand high but turnover re­mains slow

Southern Real Estate Guide - - Harveys Property Guide -

De­mand tri­umphed over sup­ply in the New Zealand prop­erty mar­ket in Au­gust, re­sult­ing in a re­cov­ery in the na­tional me­dian sell­ing price, but on con­tin­ued low sales vol­umes, ac­cord­ing to the Real Es­tate In­sti­tute of New Zealand.

The Au­gust na­tional me­dian price was a May record of $ 350,000, com­pared with the July fig­ure of $ 345,000.

Sales slipped fur­ther back, from an al­ready low fig­ure of 6660 in July to just 6394 in Au­gust, well down on the Au­gust 2006 fig­ure of 8556 sales. It was the low­est Au­gust num­ber for seven years.

In­sti­tute na­tional pres­i­dent Murray Cle­land says Au­gust sales tra­di­tion­ally re­cov­ered as part of the run-up to the prime spring sell­ing pe­riod, but the latest fig­ures were “sur­pris­ingly skinny”.

“ There has been an al­most ex­ces­sive amount of spec­u­la­tion con­cern­ing the res­i­den­tial prop­erty mar­ket and it is cer­tainly too early to say that it has shrugged off ma­jor con­fi­dence con­sid­er­a­tions such as in­ter­est rates,” he says.

Mr Cle­land noted that other sur­veys were based on le­gal set- tle­ments rather than ac­tual sales while the REINZ Au­gust fig­ures were for un­con­di­tional con­tracts as at 5.00 PM Au­gust 31 and there­fore more likely to pro­vide an up to date in­di­ca­tion of the cur­rent mar­ket.

“ The fur­ther back you go the more pos­i­tive the mar­ket has looked but even though the year on year per­cent­age was up from 10.40 per cent in July to 12.90 per cent, in Au­gust, there is no doubt that the rate of price growth con­tin­ues to slow and has been do­ing so for a while

“ The real is­sue is that de­mand for hous­ing in New Zealand con­tin­ues to ex­ceed sup­ply and while that sit­u­a­tion con­tin­ues, prices will al­ways be fi rm. But on such low turnovers it is dif­fi­cult to say from month to month that the mar­ket is good, bad, or in­dif­fer­ent,” he says.

“ There is al­ways go­ing to be an el­e­ment of dis­tor­tion in prices when sales vol­umes are this low and we be­lieve it is prob­a­bly still at least a month too early to make pre­dic­tions about the over­all di­rec­tion of the mar­ket.

“ The mar­ket in Au­gust showed signs of paus­ing to ab­sorb in­ter- est rate is­sues and that would have ap­plied to both buy­ers and sell­ers con­tem­plat­ing an­other, or big­ger, pur­chase. By the end of Septem­ber we will have a much bet­ter feel for the longterm trend in prop­erty prices.”

Of the 12 real es­tate re­gions, eight ex­pe­ri­enced rises and only three falls, “ Which can’t re­ally be at­trib­uted to a sud­den rise in con­fi­dence as much as a func­tion of low vol­umes and ven­dor de­ter­mi­na­tion,” Mr Cle­land says.

The price band dis­tri­bu­tion of sales shows that sales of houses worth more than $ 600,000 rose while sales of houses be­low $ 599,999 fell, adding to the con­fu­sion caused by low vol­umes.

As with July, the Auck­land re­gion helped sup­port the na­tional me­dian price in­crease with a rise from $ 445,000 to $ 450,000. But the rise in the metropoli­tan Auck­land me­dian from $ 442,500 to $ 450,000 was largely due to size­able in­creases in Pa­pakura and Manakau city me­di­ans while North Shore city, Waitakere city and Auck­land city all ex­pe­ri­enced re­duc­tions in me­dian prices.

The me­dian

sales price for a house in the Auck­land re­gion rose to $ 450,000 in Au­gust, from $ 445,000 in July. In to­tal, 2176 houses sold in Au­gust, down on the 2446 sold in July. In Au­gust 2006, 2885 houses sold with a me­dian sales price of $ 395,000.

In the Rod­ney Dis­trict 128 houses sold in Au­gust, down on the 160 sold in July. The me­dian price reached $ 501,500 in Au­gust, up from $ 488,250 in July. In Au­gust 2006, 167 houses sold with a me­dian price of $ 431,000.

The me­dian sales price for a North Shore home eased to $ 550,000 in Au­gust, from $ 555,000 in July (Au­gust 2006: $ 465,000); 367 houses sold in Au­gust (July 2007: 395; Au­gust 2006: 515).

Sales vol­ume dipped in Waitakere city in Au­gust with 270 houses sold (July 2007: 311). The me­dian price also eased to $ 370,000 from $ 396,125 in July. In Au­gust 2006, 424 houses sold with a me­dian sales price of $ 345,000.

The me­dian price for a house in Auck­land city fell to $ 474,000 in Au­gust, from $ 496,600 in July (Au­gust 2006: $ 432,250). In to­tal, 748 houses sold in Au­gust (July 2007: 778; Au­gust 2006: 908).

In to­tal, 479 houses sold in Manukau city in Au­gust, down on the 570 houses sold in July. The me­dian price rose to $ 419,000 dur­ing Au­gust, up from $ 385,000 in July. In Au­gust 2006, 614 houses sold with a me­dian price of $ 375,000.

Sales dipped in Pa­pakura in Au­gust with 57 houses sold, down on the 93 sold in July (Au­gust 2006: 107). The me­dian price reached $ 365,000 in Au­gust (July 2007: $ 320,000; Au­gust 2006: $ 325,000).

The me­dian price for a house in the Franklin Dis­trict eased to $ 355,000 from $ 388,000 in July (Au­gust 2006: $ 345,000). 91 houses sold in Au­gust, six more than the 85 sold in both July and Au­gust 2006.

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