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Mixed messages from the housing market

The latest housing market statistics show a somewhat contradictory picture of house prices hitting new records at while the number of sales fell sharply and the number of days it takes to sell a house increasing.

Thursday, May 20th 2004, 6:25AM

by Jenny Ruth

Real Estate Institute figures show the national median house price rose 0.6% from $240,500 in March to $242,000 in April which was 19.2% higher than the $203,000 recorded in April last year.

The largest annual increase was 48.8% in Otago followed by Southland’s 43.8% rise and Napier’s 34.2% gain. The smallest annual increase of 6.3% was recorded in Waikato/Bay of Plenty/Gisborne.

However, the number of houses sold fell 15.6% from 11,371 in March to 9,594 in April, although that was up on the 9,047 sold in April last year. The number of days it took to sell a house rose from 27 in March to 29 in April which was the same as in April last year.

Although he describes the latest figures as "hard to take a reading off," institute president Graeme Woodley says they don’t prove a slowdown is in progress.

"While some commentators are saying that the housing market is running out of steam, the latest figures don’t currently provide the evidence to support their claims," Woodley says.

Deutsche Bank chief economist Ulf Schoefisch says the volume of sales is now 22% down on the cyclical peak reached in September.

The figures suggest the slowdown is affecting lower-priced homes more. The number of sales in the under $400,000 bracket fell 16.4% in April from March while sales in the $400,001 to $600,000 bracket fell 10.9% and those above $600,000 were down 14.7%. That suggests sales of more expensive houses boosted the national median price.

Schoefisch says adjusting for these factors, he estimates house price inflation has slowed to about 2% a quarter from 7.3% in the September quarter last year and 4.9% in the December quarter.

With economists forecasting that the Reserve Bank’s official cash rate will rise from its current 5.5% to 6% or more, which will push up floating mortgage rates to 8% or more, Woodley says he expects to see further declines in sales volumes in coming months.

"What we don’t expect to see is any erosion in current property values. The price of most properties will continue to increase, although not to the extent seen over the last 12 months," Woodley says.

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build ▼4.94 - - -
AIA - Go Home Loans ▼7.49 5.99 5.69 5.69
ANZ ▼7.39 ▼6.39 ▼6.19 ▼6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼5.79 ▼5.59 ▼5.59
ASB Bank ▼7.39 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One ▼7.54 - - -
BNZ - Rapid Repay ▼7.54 - - -
BNZ - Std ▼7.44 5.99 5.69 5.69
BNZ - TotalMoney ▼7.54 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ ▼6.95 5.99 5.75 5.69
Co-operative Bank - Standard ▼6.95 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 5.65 5.55 5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.60 ▼6.65 6.40 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank ▼7.25 6.89 6.59 6.49
Kiwibank - Offset ▼7.25 - - -
Kiwibank Special ▼7.25 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 5.95 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - 6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank ▼8.19 6.49 6.49 6.49
TSB Special ▼7.39 5.69 5.69 5.69
Unity 7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.10 6.05 5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.64 6.02 5.79 5.69

Last updated: 27 November 2024 9:50am

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