Property market holds up in May: REINZ

New Zealand residential property prices are back to where they were a year ago, according to the Real Estate Institute of New Zealand.

Wednesday, June 11th 2008, 12:01PM

by The Landlord

Sales fell further in May, but although eight out of 12 real estate districts reported reduced median prices, the national median price was unchanged at $345,000, compared with the May 2007 median of $350,000 according to REINZ National President Murray Cleland.

Cleland today described the market as ‘treading water’ and showing signs of levelling off from what had earlier looked like an unpleasant trend.

Sales fell from 4,464 in April to 4,373 in May, down 52.9% on the May 2007 sales figure of 9,285, with the downturn in activity more noticeable in the north of the country.

Auckland sales were down 57.9% from 3,300 in May 2007 to just 1,388 in May although this was slightly higher than the April sales of 1,350.

“April was a very weak month especially in relation to median prices, but in such a thin market any one month is not necessarily a good guide, but when you look at April and May together it seems that the market is finding a new level, albeit a very low one in terms of sales.

“It may well be that sales settle at this level over the next few months, until the Reserve Bank takes the pressure off interest rates, but the latest figure gives some comfort in terms of values, especially in the face of some of the more extreme predictions”.

Cleland said that while the national median was unchanged, most districts experienced a drop in median prices, yet when compared to the figures a year before regions such as Auckland, Waikato/Bay of Plenty, Manawatu and Wanganui, Taranaki, Wellington, Canterbury/Westland, Otago and Southland had experienced either gains or relatively small falls in median prices over the last year.

Predictably, days to sell lengthened nationally from 44 in April to 49 in May, compared with 30 a year ago.

The national median is now down 1.42% on a year ago with the biggest regional fall being Northland, down 6.06%, followed by Hawke’s Bay, down 4.33% and Canterbury and Westland down 2.29%. Southland remains in the lead in positive territory, up 12.99% on a year ago.

Around the regions, Auckland saw its median down from $450,000 in April to $447,500 in May, slightly below the May 2007 median of $450,000, although the Metropolitan Auckland median rose, from $445,000 in April to $451,000 in May, on 1,235 sales, compared with 2,899 a year ago.

Waikato and Bay of Plenty was down from $315,000 in April to $310,000 in May, with Hamilton City down from $340,000 to $337,500, although further east, Tauranga rallied, up from $352,500 in April to $376,500.

Hawke's Bay fell from $275,000 in April to $265,000 compared with $277,000 in May last year and Manawatu and Wanganui were also down from $239,000 in April to $224,500 in May, compared with the May 2007 figure of $222,000.

Taranaki rallied well with its median up from $269,000 in April to $285,000 in May, up on the May 2007 figure of $281,000.

Wellington followed a similar trend up from $375,000 in April to $388,000 in May, ahead of the May 2007 median price of $385,000.

Nelson and Marlborough district was up slightly from $336,500 in April to $337,000, ahead of the 2007 figure of $328,000.

Canterbury and Westland were down from $300,000 to $298,000, but Central Otago Lakes was up from $454,000 to $490,000 and Otago recovered from its April median of $235,000 to reach $240,000, the same as a year ago.

Southland slipped back from $215,000 in April to $200,000 in May, still ahead of the figure of $177,000 a year ago.