A looming demand for new dwellings and a predicted spring sales recovery are just some of the hopeful signs emerging for the housing sector this week.
The sector, picked by some to be hammered by a 30 per cent chop, is giving off mixed messages: still depressed but beginning to exhibit recovery signals.
First, the good news for people who want to see house prices rise. The state-owned QV revised the national house price drop from 9.2 per cent in April to a more cheering 8.1 per cent in May and noted "continued stabilisation of property values in recent months".
Figures from agencies Harcourts and Barfoot & Thompson showed signals that demand for houses was outstripping supply.
Now the bad news: mortgagee sales are rising, job insecurity has gripped the market and the latest data from the Real Estate Institute found extremely low sale volumes and the national median price dropping from April's $340,000 to May's $337,500.
So where to for this market and the financial outlook for the single most valuable asset most people own?
To help you decide - and to be cheerful because we're past the shortest day of the year - here is a list of good signs.
House prices have not been the train wreck they have overseas. Take Iceland where May's Vanity Fair reported people having US$1.5 million ($2.4 million) mortgages on US$500,000 houses.
Instead of suffering 30 per cent devaluations, New Zealand's Real Estate Institute has found only a marginal 3.5 per cent median price decline from about $350,000 in mid-2007 to today's $337,500.
Barfoot & Thompson, which handles around one-third of home sales in Auckland, yesterday described last month as "a golden autumn". It released trading data for June showing its best month in about two years. Barfoot & Thompson's volumes are ahead of last year when only about 500 sales were being made compared with June's 861 sales.
Last May, the average B&T sale price was $534,000, well up from April 2008's $520,380, Thompson said. Prices in May this year averaged $533,909 and last month averaged $521,791.
Barfoot's Peter Thompson said: "The strength of the Auckland housing market can be added to the list of 'green shoots' indicating that the economy in general and people's confidence is starting to stabilise."
BNZ chief economist Tony Alexander said this week we already had a housing shortage. With only about 13,000 new places being built annually now, the squeeze would soon get worse he predicted, asking when a select committee would be appointed to review the problem.
Alistair Helm, chief executive of Realestate.co.nz, this week predicted a spring surge in volumes and prices. By September, swelling ranks of home-buyers would chase low levels of inventory and that could lead to price pressures creeping back.
Harcourts found a reduced level of new listings in May but a 40 per cent rise in the numbers of written sales in that month this year compared with May 2008. Low mortgage interest rates of about 5.9 per cent and a recovery in immigration were helping spur the market on, said chief executive Bryan Thomson. The surge in net immigration gathered pace in May with the largest net inflow since July 2003.
And there are a number of bad signs for people who want house prices to rise.
Job insecurity and rising unemployment are suppressing listings and sales and people are simply more fearful. Westpac economist Donna Purdue cited rising fuel prices, cancelled tax cuts, slashed Fonterra's payout forecasts, rising unemployment and swine flu as just some of the reasons not to be cheerful.
National housing sales volumes have halved and are not picking up. Prices usually eventually follow volumes, either up or down. REINZ said that in May 2003, licensed agents sold 11,336 houses compared with May 2009's 6291 sales.
Treasury reckons the housing sector will stay dire for a while. Its economic and fiscal update out in May had a gloomy house price outlook, citing increasing unemployment as just one a factor putting on pressure. House prices will decline nearly 8 per cent in the year to March 2010 and a further 4 per cent in the year to March 2011, it predicted.
Mortgagee sale numbers are rising. Property and land information company Terralink revealed a 25 per cent increase in forced sales in May when 251 mortgagee sales were recorded, the highest monthly total it has recorded.
Listings remain extremely low as people withhold their houses from the market.
Barfoot's Peter Thompson said that the biggest challenge facing his company was getting those scarce new listings and at the end of last month its total listings had fallen to 5557, the lowest level in 20 months.
This week, John Stewart, general manager of the 75-agency First National, said his firm had 7916 listings, down on the 9696 of this time last year.
So that's both sides of the picture. What to conclude?
Perhaps it is that if housing is in any recovery, the shape of its rebound is more of a series of "W shapes" than the perfect "U".
HOME SWEET HOME
New Zealand has 1,651,542 dwellings, worth about $550 billion:
* 1,478,709 dwellings were occupied at the last Census.
* The rest were empty, unoccupied or being built.
Of the 743,952 dwellings owned by the residents:
* 405,267 households pay a mortgage.
* 312,159 don't pay a mortgage.
* The rest do not define their arrangements.
Of the 451,965 dwellings not owned by the residents:
* 388,272 households pay rent.
* 57,378 don't pay rent.
Of the 167,922 dwellings owned by a trust:
* 72,828 households pay a mortgage.
* 81,711 households do not pay a mortgage.
* The rest don't define their arrangements.
Most figures from 2006 Census
House prices: The good news and the bad news
AdvertisementAdvertise with NZME.