Housing recovery slows in September: REINZ

Photo / Greg Bowker

New Zealand's housing market recovery slowed last month, with a smaller-than-expected lift in new spring sales.

The number of house sales rose to 5,235 in September, up 21 per cent from the same month a year ago, but just 43 higher than in August, according to the Real Estate Institute.

On a seasonally adjusted basis, that's down 2.3 per cent. The national median house price fell $5,000 to $350,000 in September.

"The New Zealand real estate market is in better shape when compared with this time last year," REINZ chief executive Helen O'Sullivan said in a statement. "That improvement is flattening out with a weaker than usual seasonal lift from August volumes."

Last month, REINZ and Quotable Value data showed the property market was making inroads to last year's decline, when it stalled amid tepid demand as households used record low interest rates to repay debt rather than add to their mortgages.

Since then, a lack of supply and dwindling of consents for new construction has kept the sector muted, though Auckland was showing signs of life and the reconstruction of Christchurch are both expected to bolster housing.

Goldman Sachs & Partners NZ economist Philip Borkin said a low number of listings seems to be a big driver of the market, and is consistent with household caution in the state of the economy.

"The improvement in the nationwide housing market to date has been gradual despite low interest rates," Borkin said. "We see no imminent easing in these structural factors meaning that further housing market recovery will continue to be gradual."

REINZ said the national median time to sell a house fell two days to 37 days in September, and was down from 43 days a year ago.

Northland reported the strongest increase in sales numbers, up 30 per cent on the month to 143, followed by Otago up 13 per cent to 239.

Hawkes Bay had the biggest lift in prices, up 8.3 per cent to a median sale price of $270,750, followed by Auckland, up 4.9 per cent to $475,000.

The REINZ stratified median house price index, constructed with the Reserve Bank to iron out peaks and troughs in pricing information, rose 1.7 per cent to 3,279.2 in September. That's up 2.7 per cent from a year ago, though still 3 per cent from the peak in 2007.