18 October 2009

Data released this month from REINZ, recording the property market’s performance for September 2009, show that the number of houses sold increased 10 percent from a month earlier.

The first month of the ‘spring selling season’ also recorded a 1.9 percent rise in the national median house price from a month earlier.  The median price in September was NZ$350,000 - just below its peak of NZ$351,500 back in November 2007.  September’s median price was also a notable 6.1 percent higher than the median for the same month last year when it was NZ$330,000.

There were 6,464 sales during September, up from the 5,878 sales recorded in August and the 4,499 sales in September 2008.

REINZ President Peter McDonald said the figures “indicate improved confidence of buyers and sellers in the marketplace.”

“We’re seeing a slow, but steady, appreciation in sales value and we’re now back to the prices being fetched in the corresponding period in 2007 when the median was NZ$351,500,” he said.

On average in September it took 33 days to sell a dwelling, down from 34 days in August.  This was 19 days quicker than a year ago and 3.2 days faster than the September average.

ASB economist Jane Turner said that housing demand continued to be underpinned by a lift in net migration and low interest rates.

“The current heat in the housing market is taking some time to cool, with supply sluggish to respond,” Ms Turner said.

While new listings are increasing, it has not yet been enough to meet demand and so house prices are continuing to be bid up.  The “very low” number of days to sell suggested more house price inflation pressure was likely in the next few months, she said.

She also expects that the recent strength seen in the housing market will attract more sellers and encourage new building, which will soon correct the supply and demand imbalance.

However, with some of New Zealand’s prominent real estate agencies reporting high level of sales, (one reported writing 44 percent more sales in September compared to the same month a year earlier), it is expected that buoyancy in the housing market is set to continue.

Ref: NZ Herald, NZPA