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House prices see some consolidation

Thursday 20th January 2005

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House prices remainded stable in December, although the number of sales fell.

The New Zealand residential property market ended 2004 exceeding expectations with the national median sales price for December at a record $260,000 according to the Real Estate Institute of New Zealand.

REINZ National President, Howard Morley, said that the December sales statistics showed a resilient market defying the anticipated seasonal downturn traditionally associated with the holiday break.

While the number of sales nationwide was down on the previous month, from 9,502 in November 2004 to 8,377 in December 2004, and a little down on the 8,703 sales for December 2003; with the exception of 2003, more residential properties were sold in December last year and at higher prices than during any December previously.

"Contrary to many commentators' predictions, the market continues to show strength with an increase in the national median sales price of 13.53% over the 12 months from $229,000 in December 2003 to $260,000 in December 2004," Morley said.

"Since December 2001, the median sales price for residential property has increased $82,000 or 46% making residential real estate one of the better performing New Zealand investments over that period."

The median days to sell were 29 for the month, compared with 30 for the previous month (November 2004) and 23 for December 2003.

By way of comparison, the median days to sell were 31 in December 2002 and 43 in December 2001.

Six regions recorded an increase in median sales prices while prices decreased in the other five regions.

Northland's median increased from $214,000 in November 2004 to $221,500, and up from $195,000 in December 2003. Other provincial regions that experienced an increase in median prices for December were: Waikato/Bay of Plenty/Gisborne, from $230,000 to $232,000; Manawatu/Wanganui, from $149,000 to $150,000; Taranaki, from $166,500 to $186,000; Canterbury/Westland, from $225,000 to $231,000; and Otago, from $193,000 to $200,000.

The provincial regions that went against the trend when the December median sales price is compared with the previous month were: Hawkes Bay, from $236,750 to $225,000; Nelson/Marlborough, $285,000 to $265,000; and Southland, $142,000 to $138,000.

In common with Auckland and Wellington, these regions had experienced strong prices increases throughout 2004.

The median sales price in Auckland fell $2,000 in December from $352,000 in the previous month on the back of lower prices in Auckland City. North Shore, Waitakere City, Manukau, Metropolitan Auckland, and Papakura all saw an increase in median sale prices.

North Shore's median increased $10,000 to $410,000 in December, the median in Waitakere went from $289,500 in November to $291,022 last month, Manukau saw an increase of $4,000 to $319,000, Papakura went from $252,000 to $256,000, and Metropolitan Auckland's median increased $5,000 from $350,000.

However, these gains were in contrast to a fall in median price for properties sold in Auckland City in December, down $2,500 to $412,500, which in turn drove the region's median sales price down to $350,000. In Wellington the median sales price fell from $281,825 to $276,250, despite marked increases in the Hutt Valley, Northern, Southern, and Central Wellington.

In December, the median sales price for Hutt Valley properties was up $3,750 to $245,750; Northern Wellington's median went up by $27,250 to $347,250; in Southern Wellington it increased $13,750 to $378,750; and in Wellington Central, $17,000 to $373,000.

Again, these increases were offset by falls in Western Wellington where the median fell $3,000 to $405,000 and in Eastern Wellington which went from $421,250 to $400,000.

These two falls were sufficient to see the overall median price for Wellington region come back $5,575 for the month.

"We don't believe there has been any weakening in the housing market; in fact the data suggests we may be entering a period of consolidation with no erosion in the national median and we anticipate that the January figures, due out in mid-February, should show their traditional resurgence with an increase in the number of properties sold," Morley said.

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