Numbers up, but don't get too excited just yet

Spring it seems came early to much of the residential property market, although warnings resound over not mistaking a slight recovery for another housing boom.

Friday, September 25th 2009, 11:45AM

by The Landlord

Harcourts' September MarketWatch showed there were around 47% more written sales last month than in August last year with a total of 2,030 written sales, making it the second highest amount since November 2007.

The largest increase was in the Northern region, where the volume of written sales was a huge 78% ahead of the same month last year. In addition, the average sales price was 11% up on August last year, at $514,000.

The Central region also showed an impressive gain in written sales, with a 66% increase compared to August last year. Wellington saw a 40% increase in sales, while Christchurch showed a 55% gain in sales.

The South Island Provincial region was the only region to see sales decrease from last year, down 2%.

Despite the Northern region's increase in sales price, the Central region saw its average sales price drop a substantial 20% from August last year, the South Island Provinces recorded 37% a drop, while Christchurch fared a little better with only a 1% drop. Wellington was the only other region to see an increase in average price, up 7% on August 2008.

More properties came onto the market last month compared to a year earlier, but the total volume of property on hand remains limited and in some regions the slow rural market is continuing to impact on average sales price, according to Harcourts.

"While confidence in the market appears to have returned we have to be mindful of the fact that the numbers we are seeing this year are being compared to the historically low numbers of 2008," says Harcourts CEO Bryan Thomson.

"If you look further back in time our national sales numbers remain 25% below the beak of August 2005."

So although the market appears more active and positive, the lower numbers of listings over winter has created competition and helped to stabilise prices in many locations, it's too soon to be talking about another housing boom, he says.

"Notwithstanding that, serious buyers are taking action now while asking prices and mortgage interest rates are more attractive and smart sellers are seizing the opportunity to list their property before more stock comes onto the market and balances out the current situation."

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