2 June 2009

Source: NZ Herald

The housing market, which has been depressed for the past 18 months, appears to have bottomed out - at least in Auckland.

Though prices remain soft, the number of reported sales has risen in the past month and far fewer properties have been passed in at auction.

The apparent change of heart reflects not so much the state of the economy but a slow turnaround in consumer confidence brought about by record low interest rates and greater housing affordability, especially for first-home buyers.

This is reflected in the latest ASB housing confidence survey, which shows that in the past nine months those surveyed have become increasingly attracted to the housing market. For the most recent quarter - the three months to April - 59 per cent of respondents felt it was a good time to buy a house, compared with 53 per cent in the previous quarter.

ASB chief economist Nick Tuffey says the improved sentiment appears to be closely linked to the dramatic fall in interest rates in the past year.

According to Auckland’s largest real estate agency, the region’s housing market continued to surge in April, following better-than-expected performances in February and March. The average house price was $502,726, up 2.2 per cent on March. The number of sales at 809 was 79 per cent up on those for the same month last year.