House prices steady in February, sales recover

The number of houses sold in February was back to normal levels, but prices have remained steady, says the Real Estate Institute. Photo / Greg Bowker

House prices are staying steady across New Zealand, says latest figures from the Real Estate Institute.

Sales numbers during February recovered from their lowest level in nearly two decades, but the national median price stayed at $350,000, the same as the month before.

Real Estate Institute of New Zealand President Peter McDonald said it was "pleasing to see residential property sales turnover return to normal levels" for a February at 5029.

"Agents report an air of caution amongst buyers, most of whom are genuine home seekers as opposed to investors, and this is reflected in the increase to 46 in the median days taken to sell a listed dwelling," he said.

The REINZ Monthly Housing Price Index - a more accurate measure of nationwide real estate movements, increased by 0.4 per cent to 3214.8 in February.

In the three months to February, housing prices fell by 1.2 per cent.

Compared to 12 months earlier, the REINZ Housing Price Index increased by 5.5 per cent. Housing prices are now 4.9 per cent below their November 2007 peak.

In Wellington, housing prices in February were 8.2 per cent above those in February 2009 with housing prices in Auckland (up 7.2 per cent), Christchurch (up by 4.3 per cent), other North Island suburbs (up 5.9 per cent) and Other South Island suburbs (up by 2.5 per cent) also up from a year earlier.

REINZ's McDonald said recent Government discussions of potential tax changes had halted the number of inquiries from investors who usually bought at the lower end of the price range.

"Most interest at present is in the $400,000 to $600,000 bracket and no change in interest rates is keeping the genuine home buyers in the market," said McDonald. "We are seeing a good supply of listings and high levels of inquiry so we expect the market to remain reasonably balanced and maybe strengthen as we move into the autumn months."


ASB Bank economist Jane Turners said today's data confirmed the housing market was "losing momentum".

Most telling was a rise in the number of days it took to sell a house - 39 seasonally adjusted, from 36 days previously.

"The steady climb in days to sell from October's lows suggest the balance between supply and demand is returning to normal, following a period of under-supply through spring."

Turner said that a probable change in tax policy around housing meant she expected to see house sales and prices to be "weighed down by uncertainty" until the Budget at the end of May.

Philip Borkin, economist at Goldman Sachs JBWere said the stats showed
"easing momentum".

" Higher fixed mortgage rates (although they have fallen a touch over the past month) appear to have dented optimism. In addition, an increased number of listings on the market is also likely to lead to downward pressure on house prices. We expect annual house price growth to ease and be broadly flat by the end of this year."

"We view the housing market as a good lead indicator of domestic demand. With house price growth expected to ease, it highlights in our mind a likely sluggish recovery (but still a recovery) in consumer spending and residential construction," said Borkin.

While the February national median residential house price was the same as the month before, it is 6 per cent up on the median price for February 2009. There was also been an increase in 10 out of 12 districts in February when compared to the same month last year.

The largest gains were in Taranaki, up 9.61 per cent to $285,900, followed by Auckland up 7.59 per cent to $453,500.

After topping the list of percentage increases in January, Otago was the only region to experience a drop in median prices, down 0.44 per cent from $223,000 in February 2009 to $222,000 last month.

The annual increase in median prices was zero in Northland and less than 2 per cent in Waikato/BOP and Manawatu/Wanganui.

- NZ HERALD