House sales jump in November

November real estate figures provide conclusive evidence that the Reserve Bank’s interest rate medicine is reviving the housing market.

Tuesday, December 18th 2001, 8:32PM

by Jenny Ruth

The number of homes sold in November jumped to 7,881, the highest level of activity in that month since 1996, Real Estate Institute figures show. November sales were worth $1.69 billion, well up on 6,666 worth $1.44 billion sold in October and the 5,810 worth $1.23 billion sold in November last year.

The Reserve Bank has cut its official cash rate, which directly influences variable mortgage rates and indirectly affects longer-term rates, five times this year from 6.5% to 4.75% with the most recent cut on 14 November.

Institute president Rex Hadley says the low interest rate environment is a large factor in the rise in sales.

"The lower interest rates currently available have allowed a lot more first home buyers to enter the property market, it’s incredibly satisfying to see more New Zealanders be able to fulfil their dream of owning their own home," Hadley says.

"The institute has always said that home ownership is a large part of the New Zealand culture and I think November’s figures reflect that. I personally don’t believe that many people prefer to rent," he says. Floating mortgage rates now range between 6.24% and 6.90%

Reserve Bank Governor Don Brash should also be pleased that the increased activity hasn’t had an inflating effect on house prices.

The national median house price actually fell from $179,000 in October to $176,200 in November. That was still above the $174,000 median house price in November last year.

The institute’s figures show that of the 11 regions measured, activity improved in November in all compared with October and in all except Northland compared with November last year. There were 193 homes sold in Northland in November last year compared with 157 this year.

The median price figures were more ambiguous. Compared with October, prices rose in five of the 11 regions and fell in the other six. Compared with November last year, prices rose in eight regions, fell in two and were unchanged in Manawatu/Wanganui.

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