Hous­ing slump ex­pected to spread

Taranaki Daily News - - Business - SU­SAN ED­MUNDS

Parts of the coun­try are suf­fer­ing sharp house price falls of more than 10 per cent, and com­men­ta­tors say the down­turn could spread.

The Real Es­tate In­sti­tute’s lat­est data, for Jan­uary, re­veals that the num­ber of prop­er­ties sold across the coun­try was up 2.7 per cent on Jan­uary 2017.

But com­pared with De­cem­ber, na­tional house prices dropped 5.5 per cent to a me­dian $520,000.

In Auck­land, prices were down 4.8 per cent month-on-month and 1.2 per cent on the year be­fore. On an an­nual ba­sis, na­tional house price growth was 7.1 per cent.

Otago and Hawke’s Bay had record me­dian prices.

But Hi­lary Parker, of In­fo­met­rics, said the soft­ness in the mar­ket was likely to con­tinue over the next year – and spread.

‘‘Af­ford­abil­ity con­straints in other parts of the coun­try will also drag on na­tional sale vol­umes. And we ex­pect prices across the re­gions to grad­u­ally fol­low Auck­land’s de­cline.’’

The me­dian num­ber of days it took a prop­erty to sell was 46 na­tion­ally, five days longer than dur­ing the same month last year.

Na­tion­ally, this is the high­est num­ber of me­dian days to sell recorded since Fe­bru­ary 2012, and is well above the na­tional low of 30.8 days in mid-2016.

The big­gest in­creases were on the West Coast, where the time to sell in­creased by 87 days to 158, Taranaki (up 16 days to 56) and Gis­borne (up 13 days to 43).

The only re­gion with a de­crease in the num­ber of days to sell yearon-year was North­land – down three days to 45.

Real Es­tate In­sti­tute chief ex­ec­u­tive Bindi Nor­well said the in­crease in turnover in Jan­uary was pos­i­tive. In Nel­son, al­most 28 per cent more prop­er­ties sold com­pared to the year be­fore.

‘‘Jan­uary can of­ten be a quiet month for the in­dus­try as peo­ple spend much of their time at the beach or the bach. How­ever, clearly the warmer weather has helped sales, as it’s the first time we’ve seen a pos­i­tive year-on-year sales in­crease in 19 months.

‘‘There were some re­ally pos­i­tive fig­ures from around the coun­try, with 11 out of 16 re­gions ex­pe­ri­enc­ing an in­crease in sales when com­pared to the same time last year. Ad­di­tion­ally, Gis­borne saw the high­est num­ber of prop­er­ties sold in the month of Jan­uary since Jan­uary 2007.’’

ASB econ­o­mist Kim Mundy said the sta­tis­tics showed a re­ver­sal of ac­tiv­ity seen in re­cent months.

‘‘House sales fell in Jan­uary af­ter three con­sec­u­tive monthly in­creases into the end of 2018.

‘‘Sea­son­ally-ad­justed sales fell

2.5 per cent month-on-month in New Zealand, driven by falls in 11 out of 16 re­gions.

‘‘For ex­am­ple, on a sea­son­allyad­justed ba­sis Welling­ton sales fell

11 per cent, Auck­land sales were down 6.2 per cent and Otago sales ac­tiv­ity fell 7.5 per cent.’’

ANZ chief econ­o­mist Sharon Zoll­ner said the mar­ket was un­likely to take off any time soon due to peo­ple not be­ing able to af­ford the prices be­ing asked, as well as credit head­winds and new Gov­ern­ment poli­cies.

‘‘In short, hous­ing mar­ket ac­tiv­ity is well off its lows, sug­gest­ing house price in­fla­tion has likely also found a floor, but the mar­ket re­mains much cooler than it has been.’’

The Real Es­tate In­sti­tute’s house price in­dex saw an­nual house price growth fall to 3.4 per cent in Jan­uary, from 3.7 per cent in De­cem­ber.

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