The residential property market bounced back to achieve a new record national median price in February, according to the Real Estate Institute of New Zealand Inc. (REINZ).
The national median price bounded ahead from the January median of $327,000 to a new high of $335,000 in February, having earlier eased from $330,000 in December to $327,000 in January.
“The market in February was even stronger than first thought and clearly this is not the news the Reserve Bank was wanting to hear, but it’s great for homeowners in terms of growing the equity in their primary savings vehicle which is their own home”, according to REINZ National Vice President Mr Mike Elford.
“The increase in the Official Cash Rate, last week, obviously came too late to affect the market, but it will be extremely interesting to see the March figures in terms of what impact the OCR manipulations will have. Our view is it will have little effect – since most mortgages are on fixed terms – which will leave the Reserve Bank to contemplate other measures to dampen confidence in the residential housing market.
“The Reserve Bank has a job to do but unfortunately it’s based on a relatively narrow mandate, which doesn’t give responsibility for economic growth or encouraging savings and first home ownership, so the threats of further action to stem our country’s enthusiasm for residential property investment will, we suspect, remain predominantly ineffectual”.
Mr Elford said the strength of the property market in February was unmistakeable with 10 rises and only two falls in the 12 regions surveyed by the Institute, and a surge in sales from 7,566 in January to 9,357 in February, equivalent to sales in February 2003 and 2004 when the market Was regarded as being at its strongest. Days-to-sell figures were down from 38 in January, normally a shorter and slower month, to 32 in February, with Auckland and Wellington down from 36 to 30 and from 32 to 22 respectively.
Much of the growth in the national median price appeared to be driven by strong price growth in Auckland, Wellington and Southland which is now the leading region in terms of annual percentage growth at 32 percent.
Only Hawkes Bay and Taranaki let the team down, with declines in their median prices.
Northland was up from $305,000 in January to $310,000 in February while Auckland recovered well to achieve a new record median of $430,000 in February compared with $415,000 in January and $422,500 in December 2006.
Waikato/Bay of Plenty was up from $307,875 to $310,000, but Hawkes Bay was quieter at $272,000 in February compared with $280,000 in January.
Manawatu/Wanganui was stronger, up from $215,000 in January to $221,500 in February, but near neighbour Taranaki took a breather, falling from $272,500 in January to $265,000 in February.
Wellington recovered well after a drop from $365,000 in December to $351,868 in January to record a new high of $370,500 in February.
Nelson/Marlborough was up from $307,000 in January to $310,000 in February while Canterbury/Westland was up from $290,000 in January to $297,000 in February.
Central Otago/Lakes maintained its position as New Zealand’s priciest region, rising from $432,200 in January to $440,750 in February while Otago was up to the task, rising from $221,750 in January to $230,000 In February.
But Southland stole the show with an increase from $156,000 in January ($150,000 in December 2006) to a new record of $165,000 in February.
On a year to year basis, the national median price is now ahead 13.55 per cent compared with 9.0 per cent in January, with Southland leading as noted at 32 per cent, followed by Wellington up 21.47 per cent, Manawatu/Wanganui up 16.57 per cent and Northland up 12.72 per cent.
In the major areas, notable increases included North Shore City up from $497,188 in January to $503,500, but still below the December figure of $519,250.
Auckland City was up from $425,000 to $462,000 and Metropolitan Auckland was up from $417,000 to $431,500, while Hamilton City Was also strong, rising from $315,000 in January to $328,000 in the latest month.
Wellington central was up from $400,000 to $486,250, but Christchurch City was steady at $315,000.
In the smaller centres Gisborne continued its progress rising from $243,000 in January to $255,000 in February, a 17.2 per cent increase on the February 2006 median of $217,500, while Palmerston North City Was up from $249,500 in January to $278,300 in February, ahead also, of the December figure of $260,000.
Download full presss release: 2007 February REINZ Residential Market Report.pdf
Download statistics report: 2007 February REINZ Residential Statistics .pdf