Late 'spring surge' lifts property market

Photo / APN

A late spring surge in the residential property market has lifted the number of house sales back above 5000 and the national median price up to $360,000, Real Estate Institute of New Zealand (REINZ) show.

However the increase in sales has come off a record low base and is less than the 6056 sales recorded during the same period last year.

It was too early to know whether the data represented a shift in the market, economists said.

In October just 3903 properties sold - the lowest October total since REINZ records began.

The REINZ Monthly Housing Price Index increased by 1.9 per cent during November, but fell 1.9 per cent when compared with 12 months earlier.

Goldman Sachs economist Philip Borkin said house prices would remain under pressure during the first half of next year.

"One month's data has not been enough to alter our expectations of that.

"However, if a turn in housing market momentum is upon us, we would quickly become more optimistic on the NZ economy's prospects next year and hence the extent of RBNZ tightening," he said.

REINZ spokesperson Bryan Thomson said indications of a lot more listings at the beginning of last month had led to a late flush of spring activity.

"With pent-up levels of people now in the market who need to buy or sell homes, we can expect the increased activity to continue through December and the summer without the usual slowdown over Christmas."

From just 3903 transactions in October, total dwelling sales rose to 5138 in November from below 5000 for the previous five months.

The national median price rose from $350,000 in October to $360,000 last month which is also an increase on the November 2009 median price of $355,000.

It almost matches the record national median price of $360,500 recorded in March 2010.

Reflecting rising buyer interest, the national median number of days to sell has shortened to 40 from 41 in October, but is well up on November 2009 figures which show it took a median 33 days to sell a property.

"With sellers coming to terms with current market prices and buyers reassured about the long term stability of interest rates, confirmed last week by the Reserve Bank Governor, we can look forward to more positive levels of real estate market activity than we have seen over the past six or eight months," said Thomson.

ANZ economist Mark Smith said the immediate monetary policy implications of the data were limited.

"Today's report suggests the housing market may be rebounding more quickly than assumed by the RBNZ in December. However, it is only one month of data and will need to be followed a number of strong readings to shift the Reserve Bank view."

Nationally the total value of residential sales, including sections, increased from $1.67 Billion in October to $2.26 Billion in November.

The breakdown of the values of the properties sold is 204 for $1 million plus, 663 between $600,000 and $999,999, 1275 between $400,000 and $599,999 and 2996 for under $400,000.

From district to district, the changes in median prices over the past year have varied from increases of up to 3.8 per cent in five regions to falls of more than 4 per cent in three regions and a drop of 9 per cent in Northland.

- NZ HERALD ONLINE