NZ residential market cold – not hot

NEW Zealand's residential property market has cooled down and is not booming, according to the Real Estate Institute of New Zealand.

The REINZ also said there are signs the market may be in for a period of consolidation.

The latest REINZ June figures show the national median price in June was $NZ347,500, down from May’s milestone figure of $NZ350,000.

REINZ’s national president Murray Cleland said contrary to reports of a boom, the market was easing back from the frantic pace of the first five months of 2007.

“The reports earlier this week of the market sustaining its run are based on sales effectively for May which was a record month in anyone’s terms and reported by us last month. The difference being that those figures are based on property settlements whereas our figures are based on unconditional sales so by definition our figures are four to six weeks more recent and are right up to 5.00 PM on the last business day of June,” he added.

Cleland said that 7,474 sales were recorded in June, a big drop on the strong May figures of 9,285. However, taking into account the changed reporting system actual June figures were likely to be around 8,000 sales, which was very comparable with June 2006 sales of 8,428 and June 2005 sales of 8,025.

The market saw falls in median prices in seven of the 12 regions surveyed and rises in five, adding to the inconclusive picture.

However, the days to sell figure was unchanged at 30 days nationally and there was very little change in the days to sell figures in the major metropolitan areas, with Auckland steady at 28 days, Wellington down from 27 in May to 26 in June and Canterbury/Westland down from 27 to 26 also.

The Auckland Region median slipped back from $NZ450,000 in May to $NZ445,000 in June, closer scrutiny of the figures shows that the Metropolitan Auckland median was down just one thousand dollars from $NZ451,000 in May to $NZ450,000 in June and, significantly, the North Shore median was up from $NZ535,000 in May to $NZ539,000 in June, likewise the Auckland City median which rose from $NZ492,000 to $NZ495,000 in the same period, despite lower reported sales.

The major cities were surprisingly strong with Hamilton City’s median up from $NZ332,500 in May to $NZ355,000, Tauranga up from $NZ360,000 to $NZ378,250 in the same period and Rotorua up from $NZ251,000 to $NZ255,000. Napier City was up from $NZ299,000 in May to $NZ309,750 in June and Palmerston North rose from $NZ286,000 in May to $NZ293,000 in June, closely followed by a strong Wanganui City market with the median up from $NZ179,500 to $NZ202,250.

Christchurch City was steady at $NZ330,000.

Around the regions Northland was down from $NZ330,000 in May to $NZ315,000 in the latest month but Waikato and Bay of Plenty was up from $NZ315,000 to $NZ325,000.

Hawkes Bay was down from $NZ277,000 to $NZ268,100 but Manawatu and Wanganui region was up from $NZ222,000 to $NZ248,000.

Taranaki was down from $NZ281,000 to $NZ265,000 and Wellington was also down from $NZ385,000 to $NZ375,000, but Nelson Marlborough was strong, rising from $NZ328,000 to $NZ335,000.

Canterbury Westland was up from $NZ305,000 in May to $NZ305,250 in June, but Central Otago Lakes was back from $NZ485,000 to $NZ420,000 consistent with a region with relatively high values and lower sales volumes.

Otago was back from $NZ240,000 in May to $NZ230,000 while Southland gained a little more with a rise from $NZ177,000 to $NZ177,750 in June.

Southland also remains the leading region in terms of annual median house price growth at 24.73% followed by Manawatu and Wanganui up 19.23% and Nelson and Marlborough in third place at 17.95%.

The national annual price growth rate is 12.09%.

Australian Property Journal