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Don't they know it's winter?

Jenny Ruth

Thursday 19th June 2003

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Jenny Ruth
Not only do the latest housing market figures show no signs of the traditional winter slowdown, but the number of house sales in May totaled an unprecedented 11,158.

That's up from the 9,047 houses sold in April and up from the previous record in March of 10,747 sales, according to the latest Real Estate Institute figures.

Not only that, but the national median house price reached yet another record at $210,000 in May, up from the last record set last month of $203,000. That's 11.7% higher than in May last year.

Real Estate Institute president Graeme Woodley says the recent fall in mortgage interest rates is supporting market confidence and the Reserve Bank cutting its Official Cash Rate early this month will "encourage stability in the home ownership market."

Indeed, while others might worry that New Zealand is experiencing a housing market bubble, Woodley still sees the market as being in catch-up mode from "a very flat period in the late 1990s."

He certainly sees no imminent end to the current buoyancy. "Over the next couple of months we might expect some seasonal easing in the market but with likely further falls in interest rates and strong demand for housing arising from factors such as positive migration, the fundamentals of the market still look pretty sound," he says.

The key Auckland market was one of the four regions in which the median price fell compared with April, but that was only from $290,000 to $289,000 which is still 8.6% ahead of the $266,000 median price recorded in May last year. As well the number of homes sold in Auckland jumped to 4,005 in May from 3,009 in April and 3,268 in May 2002.

Woodley says of the price fall that "it is far more likely that this is a result of sales of lesser value predominating in this period rather than a slip in overall values."

Compared with May last year, Northland was the only region to suffer a fall in the median price.

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