House sales jump in November
November real estate figures provide conclusive evidence that the Reserve Bank’s interest rate medicine is reviving the housing market.
Tuesday, December 18th 2001, 8:32PM
by Jenny Ruth
The number of homes sold in November jumped to 7,881, the highest level of activity in that month since 1996, Real Estate Institute figures show. November sales were worth $1.69 billion, well up on 6,666 worth $1.44 billion sold in October and the 5,810 worth $1.23 billion sold in November last year.
The Reserve Bank has cut its official cash rate, which directly influences variable mortgage rates and indirectly affects longer-term rates, five times this year from 6.5% to 4.75% with the most recent cut on 14 November.
Institute president Rex Hadley says the low interest rate environment is a large factor in the rise in sales.
"The lower interest rates currently available have allowed a lot more first home buyers to enter the property market, its incredibly satisfying to see more New Zealanders be able to fulfil their dream of owning their own home," Hadley says.
"The institute has always said that home ownership is a large part of the New Zealand culture and I think Novembers figures reflect that. I personally dont believe that many people prefer to rent," he says. Floating mortgage rates now range between 6.24% and 6.90%
Reserve Bank Governor Don Brash should also be pleased that the increased activity hasnt had an inflating effect on house prices.
The national median house price actually fell from $179,000 in October to $176,200 in November. That was still above the $174,000 median house price in November last year.
The institutes figures show that of the 11 regions measured, activity improved in November in all compared with October and in all except Northland compared with November last year. There were 193 homes sold in Northland in November last year compared with 157 this year.
The median price figures were more ambiguous. Compared with October, prices rose in five of the 11 regions and fell in the other six. Compared with November last year, prices rose in eight regions, fell in two and were unchanged in Manawatu/Wanganui.
TOTAL DWELLINGS MEDIAN PRICE COMPARISONS FOR OCTOBER 2000-2001
OCT 00 SEPT 01 OCT 01
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