Falling rates stimulate market

The Real Estate Institute says the April housing sales figures show falling mortgage interest rates are helping to stimulate the housing market.

Monday, May 21st 2001, 3:28PM

by Jenny Ruth

While the number of house sales dipped compared with March, they were up compared with April last year and the median price was higher than in either March or April last year.

"March is traditionally one of the most active months for real estate transactions and 2001 is no different. It was always unlikely that April would achieve a similar number of sales," says institute president Rex Hadley.

Sales nationally totalled 6,506 in April compared with 6,559 in March and just 5,238 in April 2000.

"Such a high level of improvement over last year’s sales volume bodes well for the residential housing market in 2001, and demonstrate the stimulating influence easing mortgage interest rates have had on the residential market," Hadley says.

Total sales rose from $1,394,271,191 in March to $1,423,745,699 in April. That compares with $1,106,697,099 in April 2000. The median sale price of $178,000 was $4,200 higher than in March and compares with $177,000 in April last year.

A year ago, many New Zealanders had lacked confidence in the country’s economic direction and had effectively sat on their hands, Hadley says.

"More recently, factors such as falling interest rates and improved employment figures have encouraged homebuyers, not only to re-enter the market, but also to increase their level of financial commitment to residential property."

The Reserve Bank has cut its official cash rate, from which other interest rates are set, three times this year from 6.5% to 5.75%. The unemployment rate has fallen to a 13-year low of 5.4%.


REINZ PROPERTY MARKET REPORT
TOTAL DWELLINGS MEDIAN PRICE COMPARISONS FOR APRIL 1996-2001

REGION
APR96

APR97

APR98

APR99

APR00

MAR01

APR01

Northland
113,000

130,000

141,000

152,250

157,000

146,500

150,000

Auckland
229,000

236,000

235,000

235,000

242,000

248,500

248,500

Waikato/BOP/Gisborne
130,000

141,750

145,500

153,000

157,000

160,000

165,000

Hawkes Bay
122,500

127,500

109,750

131,000

125,000

130,000

128,000

Manawatu/Wanganui
103,000

102,500

101,000

10,000

100,750

106,000

109,000

Taranaki
105,000

95,000

100,000

101,000

108,000

105,000

106,500

Wellington
142,000

150,000

156,150

175,000

190,000

190,000

195,000

Nelson/Marlborough
134,000

140,500

146,000

142,510

146,250

150,000

147,500

Canterbury/Westland
129,000

140,250

141,750

148,000

140,000

149,000

135,000

Otago
104,500

102,500

89,500

94,750

100,000

95,250

99,250

Southland
78,000

85,000

75,000

90,500

103,500

85,000

96,000

NZ Total
$149,000

$162,500

$160,000

$170,000

$177,000

$173,800

$178,000