Residential property market continues to exceed expectations

The New Zealand residential property market ended 2006 exceeding expectations, with the national median sales price for December at $330,000 according to the Real Estate Institute of New Zealand Inc (REINZ).

Monday, January 22nd 2007, 10:22AM

by The Landlord

REINZ national president Murray Cleland said the December sales statistics showed a resilient market that had shunned an anticipated seasonal downturn traditionally associated with the holiday break. While the number of sales nationwide was down on the previous month, from 9,990 in November 2006 to 8,245 in December 2006, sales were well ahead of the 6,906 properties sold in December 2005.

“Contrary to some commentators’ predictions, the residential market continues to perform strongly with the national median sales price up 11.86% over the 12 months from $295,000 in December 2005 to $330,000 in December 2006. While down on the previous year’s 13.46% increase; 2006’s result is another double digit increase that comes on the back of several years of stellar performances.”

The median days to sell were 29 for the month, the same as the previous month (November 2006). This compares with 27 in December 2005 and 29 in December 2004.

Of the 8,245 properties sold during the month, 35% sold for more than $400,000, the same ratio as for the previous month, November 2006. By way of comparison, 29% of properties sold in December 2005 and 22% of properties in December 2004 sold for more than $400,000.

Six regions recorded an increase in median sales prices in December, on a month-by-month basis, while prices were down in the other six regions. On a year-by-year basis, 11 regions of the 12 regions saw an increase in median sales prices, the exception being Central Otago Lakes, which had experienced strong increases in recent years.

Northland’s median increased from $285,000 in November 2006 to $290,500, and up from $290,000 in December 2005. Taranaki’s median price increased from $265,000 in November to $270,000 in December 2006.

Other regions that experienced an increase in median prices in December were: Manawatu/Wanganui, from $208,000 to $215,000; Nelson/Marlborough, from $319,000 to $320,000; Canterbury/Westland, from $289,500 to $290,000; and Central Otago Lakes, from $392,500 to $422,500.

Those regions that saw the greatest year-on-year increase in the national median sales price were Taranaki, 17.39%; Manawatu/Wanganui, 16.53%; Wellington, 15.50%; Nelson/Marlborough, 13.87%; Otago, 11.70%; Waikato/BOP, 11.52%; Canterbury/Westland, 10.26%; Southland, 7.14%; and Auckland, 6.96%.

“The residential property market has performed strongly over the last year and I don’t see a lot changing this year. Interest rates may go up a bit and that might make people more cautious about buying. Then again continued strong migration would likely offset any impact from rising interest rates,” Cleland said.

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