Strong housing market stabilises in April

The latest house sales figures from the Real Estate Institute suggest the still very strong housing market is stabilising after dramatic growth since late last year.

Wednesday, May 22nd 2002, 5:52PM

by Jenny Ruth

The latest house sales figures from the Real Estate Institute suggest the still very strong housing market is stabilising after dramatic growth since late last year.

The median house price rose from $186,000 in March to $189,000 in April while the number of homes sold fell from 9,742 in March to 9,224 in April.

That’s still 6.2% up on the $178,000 median house price in April 2001 while activity is 41.8% up on the 6,506 homes sold in April last year.

Real Estate Institute president Rex Hadley says sales volume was the highest for the month of April since his organisation began collecting these figures in 1988.

"Given the recent level of activity and nationwide improvement in property values, it is pleasing to see the market begin to stabilise. This is essential, in order to avoid the boom/bust environment seen in the past, and as a result the residential market has set a path for steady, sustainable growth," Hadley says.

The easing in activity between March and April is largely a seasonal trend rather than a reflection of rising interest rates, he says. The Reserve Bank has raised its official cash rate (OCR) from 4.75% to 5.5% so far this year.

April’s transactions were worth $2.18 billion, down from $2.24 billion in March but well up on the $1.43 billion recorded in April last year.

The institute’s figures show that activity in all of the 11 regions measured improved in April compared with April last year. Activity abated in seven of the regions but increased in the other four.

The median house price rose in nine of the 11 regions in April compared with April last year but fell in Taranaki and Southland. Compared with March, the median house price rose in seven of the regions but fell in Northland, Hawkes Bay, Taranaki and Otago.

In the key Auckland market, which is likely to be among the Reserve Bank’s major inflation concerns, the number of homes sold in April eased to 3,379 from 3,708 in March but were well up on the 2,360 sold in April last year.

But Auckland’s median house price continued to rise from $248,500 in April last year, $262,500 in March this year and $265,000 in April this year.

REINZ PROPERTY MARKET REPORT
TOTAL DWELLINGS MEDIAN PRICE
COMPARISONS FOR APRIL 2000-2002

REGION	APRIL 00	APRIL 01	March 02	APRIL 02
Northland	157,000	150,000	176,000	155,000
Auckland	242,000	248,500	262,500	265,000
Waikato/BOP/Gisborne	157,000	165,000	156,500	169,000
Hawkes Bay	125,000	128,000	137,500	131,100
Manawatu/Wanganui	100,750	109,000	110,000	115,000
Taranaki	108,000	106,500	115,750	105,750
Wellington	190,000	195,000	205,000	212,000
Nelson/Marlborough	146,250	147,500	157,000	167,750
Canterbury/Westland	140,000	135,000	141,000	146,000
Otago	100,000	99,250	107,000	105,000
Southland	103,500	96,000	79,750	82,000
NZ Total	$177,000	$178,000	$186,000	$189,000