NZ housing recovery still limp in October, REINZ says

Friday 11th November 2011 1 Comment

New Zealand’s housing market is still limping along as buyers refuse to over-pay for properties, keeping the volume of sales muted.

The number of sales rose 28 percent to 5,007 last month compared to October last year when the market was plumbing 20-year lows, but was 4.4 percent down from September, according to the Real Estate Institute. On a seasonally adjusted basis, volumes fell 0.5 percent in the month.

“The volume figures for October suggests that the spring ‘lift’ widely expected in the real estate market has been muted,” said chief executive Helen O’Sullivan, in a statement. “Properties perceived by prospective buyers as over-priced are not generating much interest at all.”

Quotable Value data this week showed property values are still on the rise, and are 4.4 percent from the 2007 peak on a nationwide basis. The bulk of that improvement is emanating from Auckland, which has underpinned the market which has struggled to recover from depressed values and prices in the wake of the global financial crisis.

Still, October was a tough month for Auckland house sales, which fell 4.7 percent last month, though are still up 35 percent from the same month a year ago.

The national median sale price rose 2.6 percent to $359,000 last month compared to both September prices and October 2010 prices, while average number of days to sell a house shortened to 35 days from 35 days in September and 41 days a year ago.

The REINZ stratified median house price index, constructed with the Reserve Bank to iron out peaks and troughs in pricing information, fell 0.3 percent in October and are up 3.4 percent from the same month a year ago. The index is 3.3 percent below the peak recorded in 2007.

BusinessDesk.co.nz

Comments from our readers

On 14 November 2011 at 9:03 am Signals said:

Is the reference to being 4.4% down on the 2007 peak taking account of inflation? The CPI has moved up 13.4 % over that period. Does that mean that in real terms the prices have dropped 17.8%?