NZ property activity, values improve in March: REINZ

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New Zealand's property markets steered towards recovery in March, with the Auckland region leading the charge due to the ongoing housing shortage.

Nationally, sales volumes rose 5.4 per cent in March compared to the previous month on a seasonally adjusted basis and stripping out the Canterbury and Westland region, according to the latest data from the Real Estate Institute.

On an annual basis, also excluding Canterbury and Westland, the number of sales rose 1 per cent in March from the same month last year. Pricewise, the median sales value rose 4.3 per cent from February to $365,000, and was 1.2 per cent higher than in March last year.

The figures are broadly in line with the latest March data from government valuer Quotable Value, which showed values had leveled off in the month after declining sharply in February on the back of the Christchurch earthquake.

"The recent interest rate reduction appears to have done the trick and given activity a boost," said Philip Borkin, an economist at Goldman Sachs & Partners. "But what this also means is that this 'emergency' cut cannot be left for too long. It is raising the possibility that the OCR cut will be removed earlier than our current 1Q12 forecast."

In Auckland, a persistent shortage of housing stock and a lack of building activity continued to drive the activity in March, with volumes up a seasonally adjusted 10.5 per cent on February, and 10.8 per cent on an annual basis.

Underscoring the volume growth was an improvement in the national median 'days to sell', calculated as the period between the listing and the unconditional date, which fell to 41 days in March from 58 days in February.

The median time to sell a house in Auckland last month was 35 days, a reduction of 15 days from February. In March 2010, the median days to sell in Auckland were 34. Northland remained the region with the longest property turnover period at 94 days, down from 111 days in February.

REINZ said volumes in Christchurch fell dramatically in March, falling a further 4 per cent in March following a 27 per cent fall in February. The market is expected to remain subdued for some months to come due to difficulties in securing insurance.

This story has been corrected from a previous version published on April 13.

That story omitted context in second paragraph that annual sales volumes excluded Canterbury and Westland. Paragraph eight has been corrected to show national median days to sell fell to 41 not by 41.

Auckland days to sell fell by 15, not to 15.