Sales recover while residential property median treads water

Residential property sales volumes recovered in October but low volumes continue to distort residential property statistics, says the Real Estate Institute (REINZ).

Saturday, November 10th 2007, 10:21AM

by The Landlord

October sales recovered by nearly 1000 to 6854 in October compared with 5,894 in September, which was the lowest since the 2001 sales of 5,550 and almost half the September 2003 sales of 10,686.

But October sales remain 2000 sales lower than the October 2006 sales figure of 8857, causing ‘price static’ in some regions according to REINZ president Murray Cleland.

The national residential median price eased from $351,500 in September back to the August figure of $350,000.

“Some of the regional statistics are being unduly influenced by low volumes and generally areas where prices are holding up are the likes of Auckland region and Auckland metropolitan, where the regional price is up from $441,500 in September to $445,000 in October, while the Auckland metropolitan prices, which might have been expected to fall, hung on steadfastly with an unchanged median of $445,000.”

Cleland said Northland and Hawkes Bay were examples of areas with ‘price static’ where low volumes were skewing median prices.

Northland’s median was down from $320,000 in September to $310,000 in October, but of the two components, Whangarei City had an unchanged median of $305,000 while Whangarei County saw its median fall from $482,000 in September to $376,500, but on respective monthly sales of just 17 and 20 transactions.

In Hawke’s Bay the median was down from $285,000 to $262,000 largely because of transactions of less expensive properties, with the Hawkes Bay county price down from $400,000 to $282,500, but on just 16 sales in October.

And while Hastings City saw an increase from $283,250 to $289,500, Napier City, just a few kilometres up the road, saw its median fall from $306,000 to $272,900.

“In other words our advice is don’t read too much into these medians in this current market,” Cleland says

However, it was clear that the rate of annual growth in property prices was now slowing markedly with the annual percentage growth rate down to 8.02% for the 12 months to October, compared with the rate of 12.3% cent to September.

Cleland said that the annual percentages were heavily influenced by those areas which had seen price growth in the earlier part of the cycle, such as Hawkes Bay, which registered a 5.15% decrease in year on year prices, while Southland was at the tail end of the cycle and was still showing a 24% year on year percentage increase.

Cleland said that the beginning of spring had helped the market to regain some volume and there appeared to be no great pressure on prices, but days to sell had lengthened nationally from 32 to 34.

Of the 12 regions, eight experienced falls and only four saw rises in median prices.

Auckland’s performance was largely supported by the North Shore market, which despite lower sales saw its median up from $520,000 to $545,000 and Manukau City up from $430,000 to $447,000.

Auckland City was down slightly from $480,000 to $479,000 but on sales up from 641 to 778.

The Waikato and the Bay of Plenty was up from $322,750 to $329,000, with Tauranga up from $358,000 to $406,000, while Hamilton City and Mount Maunganui/Papamoa were down.

Manawatu/Wanganui was another region to experience a fall in medians, from $240,000 to $233,250 while Taranaki fell from $265,000 to $262,250.

Swelling eased back from $380,000 to $365,000 in Wellington, but Nelson/Marlborough was up from $330,250 to $347,000.

Canterbury/Westland region was down from $315,000 to $310,000, but Central Otago Lakes lived up to its reputation for big prices and big fluctuations with a median up from $477,500 in September to $545,000 in October as a result of the Central Otago median rising from $408,000 to $445,000, and the Queenstown median rising from $584,000 to $614,000, but on low volumes.

Otago was back slightly from $236,000 in September to $235,000 in October while Southland experienced a fall from $195,000 to $186,000 after a stellar year.

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