Housing sales remain strong

Housing sales remain strong, even though the number sold in May fell slightly from April and the median house price slipped.

Real Estate Institute figures show 6,461 houses sold in May compared with 6,506 in April. But institute president Rex Hadley says the better comparison is with May last year when only 5,424 houses sold.

"In May and June with winter coming on, it's never that good. We're delighted we've sold 6,000 plus," Hadley says. "It's not quite `97, `97 was a magnificent year. What we're looking at is getting out of the rut of 2000,'' he says. In May 1997, 8,031 houses sold.

The total value of homes sold at $1.315 million was down from April's $1.424 million but well up on $1.077 in May last year. "That's a reason to rejoice," Hadley says.

He cites the same reasons behind the last few months' improvements: declining interest rates and the reasonably buoyant economy, particularly the rural economy. "The dairy payout is going to have some bearing on this month's turnover," he says.

The record dairy payout means the average diary farmer will gross about $345,000, about $100,000 more than last year. The Reserve Bank has cut its official cash rate, from which other interest rates are set, three times this year from 6.5% to 5.75%.

The median house price nationally fell to $170,000 in May from $178,000 in April and $172,000 in May last year. Hadley says the median price is far less important than volume. "If you get a few million dollar properties, it makes a big difference across the board."

Compared with April, the median house price in May fell in eight of the 11 regions, including Auckland and much of the North Island, and improved in only two, Nelson/Marlborough and Wellington. Compared with May last year, the median house price rose in five regions, fell in four and was stable in two.