Residential property prices broke out of the relatively narrow band of price movements of recent winter months with a good recovery in October, according to the Real Estate Institute of New Zealand (Inc).
The national median price increased from $313,000 in September to $324,000 in October, reflecting the usual seasonal increase in buying interest at this time of year, according to the Institute.
The national median had moved in a narrow band for some months, from $310,000 in June, to $313,000 in July, back to $310,000 in August, returning to $313,000 in September.
“Clearly there has been a lot of pent up demand over recent months and this has manifested itself in October, driven by increasing buyer demand, a shortage of listings, plus more confidence among vendors”, according to REINZ Vice President Mr Mike Elford.
“The extent of the increase especially in some regions has come as pleasant surprise. But the supporting statistics of sales volumes and days to sell lends weight to the view that particular market supply-demand circumstances have caused the increases in prices and as such this may be something of a one-off seasonal occurrence”, Mr Elford said.
“Apart from the arrival of fine weather, which always spurs the market, other external factors such as a temporary easing in interest rates in October may also have some bearing. The Reserve Bank has held the OCR steady for some time and this coupled with recent inter-bank competition for mortgage interest rates which saw a 7.99 per cent ‘billboard’ two year fixed mortgage rate offered last month, may have encouraged those contemplating a purchase to take advantage of what has certainly turned out to be only a temporary weakness in interest rates”.
“Generally consumer confidence seems to be picking up, unemployment is low and people seem to be gaining confidence in their financial circumstances”, Mr Elford said.
Download full documents:
REINZ Residential Market Report Release Oct-2006.pdf
REINZ Residential Market Report Stats October 2006.pdf