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Residential Property Market Defies Doom and Gloom
13 Nov 2008
Despite predictions of “doom and gloom” for the Zealand residential real estate market, October sales figures released by the Real Estate Institute of New Zealand (REINZ) today show a rosier picture.
Vice President Peter McDonald says that a year ago, financial commentators were predicting a 30 percent fall in residential property values
“But our figures show an overall decrease of just 4.28 percent from a year ago, and in fact, in five out of 12 regions, property sales values have actually increased.”
Northland, Hawkes Bay, Taranaki, Wellington and Southland all recorded a percentage increase in sales values over the corresponding period last year, with Taranaki doing the best with an increase of 8.67 percent closely followed by Northland with 8.38 percent. The biggest drop was in Central Otago Lakes where property values dropped by 12.84 percent.
The median house price New Zealand-wide in October was $335,000 compared with $330,000 last month.
Regionally, Northland’s median house price rose from $310,000 to $336,000 in October 2008 compared with October 2007, while Auckland showed a slight drop moving from $445,000 a year ago to $433,000 last month.
In Waikato/BOP, the price dropped from $329,000 to $315,000, while in Hawkes Bay, there was a slight increase from $262,000 to $264,000.
In Manawatu/Wanganui, prices fell from $233,250 to $230,000, but showed a sharp increase in Taranaki from $262,250 to $285,000. And in Wellington, prices rose from $365,000 to $369,000.
In the South Island, Nelson/Marlborough saw a drop from $347,000 to $325,000; Canterbury/Westland a drop from $310,000 to $292,000 and the biggest fall was in Central Otago Lakes, from $545,000 to $475,000.
Otago was down to $230,000 from $235,000 but Southland showed an increase, up to $198,500 from $186,000.
Mr McDonald says that it is heartening to see the market holding its own despite the problems in the United States, the international financial markets and high interest rates, “not to mention the loss of confidence caused by negative opinions published in the media”.
“Going forward, the news is even better,” he says. “Up-to-date reports post election show the level of activity has increased with more enquiries showing the market may be picking up. Uncertainty caused by the election has stabilised and with interest rates and fuel prices going down, people’s confidence in real estate is returning.”
He says interest is across the board with all areas holding – the million dollar plus bracket through to the well under $500,000.
While sales values have remained relatively steady, there has been a drop in turnover with 4,469 sales recorded compared with 6,854 in October 2007. This is about the same number of properties as turned over in October 2000 when 4,887 properties were sold.
Despite lower volumes of sales, the rate of sale has improved from a median of 52 days last month to 47 days in October. This continues a downward trend from 58 days in July, to 55 days in August.
“We’ve also just come through a long, cold, wet winter with a later than usual spring which is contributing to renewed interest in the residential market,” Mr McDonald says.
REINZ Residential Market Report - October 2008.pdf
REINZ Residential Market Report Stats October 2008.pdf