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Consolidation In Residential Market
11 Jun 2009
There has been a slight fall in the value of properties sold in May across the country, but volumes remain steady as does the length of time required to sell a home. All these are signs which point to market stability says Mike Elford, president of the Real Estate Institute of New Zealand (REINZ).
The REINZ May sales figures released today show people are prepared to pay market rates for properties, and the rise in the number of properties in the upper end of the market indicates a level of confidence.
Mr Elford said the biggest issue currently facing the industry is a shortage of stock.
“With an apparent reluctance to sell in what is perceived to be a buyers’ market, people are tending to hunker down and sit tight on their properties. This, combined with a seasonal trend for people to hibernate rather than put their home on the market in the winter months, has led to an acute shortage of houses on the market.”
He believes this trend will continue through June and July.
“Traditionally, people start thinking about selling around August and September as the weather warms up, but until then, we expect turnover to remain consistent with the number of properties that are put on to the market.”
Mr Elford’s comments are backed up by the volume of homes sold in May which repeats last month’s improvement on the previous year’s turnover, although slightly down in May 2009 compared with April totals.
The total number of homes sold nationwide has remained steady in May (6,291) which is marginally up on the April 2009 figure of 6,210. However, this compares with 4,372 in May 2008 which is a pleasing trend, Mr Elford said.
Following last month’s pattern, turnover continues to be strong in Auckland where 2,114 properties changed hands in May 2009 compared with 1,388 in May 2008. Turnover is consistent with last month’s figures across the country.
The total value of sales nationally in May 2009 was $2,601 million, (up from $2,538 million in April). Of these, $1,151 million worth of sales took place in Auckland, $293.5 million in Wellington and $314 million in Canterbury/Westland.
Sales of properties in the $1 million + category rose from 151 to 180 in May 2009 compared with April 2009. There was an increase in property sales in the $600k - $999,999 bracket from 631 to 657. Properties in the under $400,000 and the $400k - $599,999 bands remained consistent from April to May.
The median price for homes across New Zealand remains constant over the past two months with the May 2009 national median of $337,500 compared with April 2009 at $340,000. This represents a 2.17 per cent drop on the national median house price in May 2008.
Regionally, there have been insignificant drops in median house prices in most regions with the exception of Auckland and Waikato/Bay of Plenty where the median property prices rose by .55 per cent and .64 per cent respectively. The greatest falls in May 2009 were Taranaki (-8.42 per cent), Central Otago Lakes (-12.75 per cent) and Southland (-10.00 per cent) compared with May 2008.
The length of time it took to sell a house in May (a median of 42 days nationally) is the same as April and faster than the 49 days in May 2008. Regionally, houses are turning over fastest in Auckland (37 days), Otago (34 days), Southland (37 days) and Wellington (41 days). Days to sell are longest in Northland (65), Central Otago Lakes (85) and Manawatu / Wanganui (55).
“The May figures are very much a sign of the times and the season,” Mr Elford says. “Like everyone else, the real estate industry looks forward to spring.”
Residential Market Report - May 2009.pdf
Residential Market Report Stats May 2009.pdf