Demand high but turnover remains slow
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.
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.