House prices, sales volumes and time to sell all up in February

Monday 14th March 2011

February proved to be a mixed month for the housing market with volumes and the average median price up, but the average time to sell also increasing, according to the latest REINZ report.

"Overall the data is a bit of a mixed bag," said REINZ CEO Helen O'Sullivan.

"February's transaction volumes were always going to be an improvement on January, but the improvement in the raw medians in most districts as well as in the stratified median price is a positive sign."

Over February across the country 4,502 unconditional sales were reported, 38% higher than January or a 45% increase when Canterbury/Westland figures are excluded.

The national median price increased by $10,000 from January to $350,000, equal to the median recorded at the same time last year.

"The recovery in transaction volumes in Auckland and Manawatu/Wanganui is encouraging, with both areas recording higher numbers of transactions in February 2011 than in the same month of 2010. In fact, Auckland's transaction volumes were marginally higher - by just one transaction - than in February 2009. On the less positive side, the overall transaction numbers are still 4.3% below the February 2010 level, and median days to sell increased national and in most areas," O'Sullivan said.

REINZ also said reports from members suggest that despite rising rents in key urban areas and a continued shortage of property, particularly in Auckland, buyers remain cautious. This is evident in the increased days to sell. Equally, landlords are not under pressure to sell and are successfully increasing rents, albeit by small increments.

Looking ahead, O'Sullivan said, "The recent cut in the OCR by the Reserve Bank of 50 basis points may provide some encouragement to buyers – equally however it makes it easier for current owners to hold if they don't see the pricing they expect. We would be really pleased if the rate decrease had a positive impact on the construction of new housing stock, especially in the Auckland market."

Across New Zealand the total value of residential sales, including sections, rose to $1.92 billion in February 2011 compared to $1.3 billion in January 2011.

The national median days to sell rose from 51 days in January 2011 to 58 days in February 2011, also up on the year earlier figure of 46 days. All regions apart from Nelson/Marlborough saw an increase in days to sell.

The REINZ Housing Price Index rose 2.3% in February 2011 compared with January 2011, with the stratified median house price at just below $360,000. Increases were recorded across the country and the index is now 5.6% below the November 2007 peak.

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