House prices bounce

The median house price bounced back strongly in October after September’s alarms, as did activity, although not quite back to August’s levels.

Thursday, November 15th 2001, 9:20PM

by Jenny Ruth

The August figures were the first to show an unambiguously stronger market following winter weakness in June and July.

The median house price rose from $173,000 in September to $179,000 in October which was also better than the August price of $176,000, Real Estate Institute figures show.

The number of homes sold rose from 5,604 worth $1.17 billion in September to 6,666 worth $1.44 billion in October. That was still behind the 6,976 worth $1.45 billion sold in August.

Particularly after Wednesday’s move by the Reserve Bank to cut interest rates, the Real Estate Institute is keen to focus on the positives.

Institute president Rex Hadley focuses on the year-on-year figures which show the number of homes sold rose from just 4,887 worth $980.3 million in October last year and that the median house price rose from $170,500 last October.

"Such a high level of improvement over last year’s sales volume bodes well for the residential housing market," Hadley says.

"Interest rates are now at the lowest level seen in many years and this creates a huge opportunity for both existing homeowners and New Zealanders wanting to buy their first homes," he says.

The Reserve Bank cut its official cash rate, which directly influences variable mortgage rates and indirectly affects longer-term rates, from 5.25% to 4.75% on Wednesday.

Banks quickly matched this by cutting mortgage rates across the board to historically low levels. WestpacTrust was one of the first off the mark, offering a five-year fixed rate of 6.99%, the lowest five-year rate ever offered by a major New Zealand bank while ANZ Bank is offering 4.95% for a six month fixed rate loan.

The institute’s figures show that of the 11 regions measured, activity improved in all compared with October last year and in all but two compared with September. The odd ones out were Northland, where sales fell from 162 in September to 151 in October, and Taranaki, where sales fell from 139 to 132.

The median price figures were more ambiguous. Compared with September, prices rose in six of the 11 regions and fell in the other five. Compared with October last year, prices rose in five regions, fell in five and were unchanged in Taranaki.

REINZ PROPERTY MARKET REPORT
TOTAL DWELLINGS MEDIAN PRICE
COMPARISONS FOR OCTOBER 2000-2001

REGION	OCT 00	SEPT 01	OCT 01
Northland	155,500	135,000	160,000
Auckland	233,000	249,000	258,000
Waikato/BOP/Gisborne	155,000	158,000	163,500
Hawkes Bay	135,500	132,500	130,000
Manawatu/Wanganui	112,000	107,000	105,000
Taranaki	100,000	105,000	100,000
Wellington	190,000	185,000	195,000
Nelson/Marlborough	149,500	150,000	147,000
Canterbury/Westland	142,500	142,000	141,000
Otago	95,500	92,500	110,500
Southland	90,000	83,000	89,000
NZ Total	$170,500	$173,000	$179,000