Modest pick-up predicted
Any housing market pick-up this year is likely to be modest, says the ASB Bank.
Saturday, February 24th 2001, 2:42PM
Any housing market pick-up this year is likely to be modest, says the ASB Bank.
In their latest weekly overview, bank economists say that January house sale data released recently by the Real Estate Institute (see earlier story) probably understates the extent of the current improvement. "Anecdotal evidence would suggest that this data - a record of settlements - understates the extent of the current pick-up in housing activity: actual sales apparently picked up even faster in January and continue to improve in February."
The REINZ also reported a higher median sale price for January ( up 3.4 per cent on January 2000), but ASB Bank economists say that, in this case, the extent of increase appears overstated. "The median was biased upwards by more high-priced houses sold."
"An alternative measure of house price movement was provided by Quotable NZ. They reported that the average house value declined by 0.1 per cent over the December quarter (-1.3 per cent over the year). In Auckland the average decline was -0.7 per cent (-2.5 per cent).
"Tie these data together with the more recent pick-up in activity and the situation would appear to be one of prices bottoming and turnover picking up.
"A word of warning however: population growth remains low, housing supply would appear ample and a slower global growth rate will dampen New Zealand income growth. Any housing market pick-up this year is likely to be modest."
The bank's market report says the focus this week will be on confidence, with surveys due for release including US consumer confidence (Tuesday night) and New Zealand business confidence (Wednesday) along with the New Zealand monetary policy review (also Wednesday).
"Confidence surveys are of influence at present," they say, pointing to two rates cuts by the US Federal Reserve in January and the pull of confidence surveys here to affect RBNZ moves. " In light of this central bank sensitivity, the focus next week will be on the US consumer and manufacturing surveys. In New Zealand, it may be a month or two yet until any local confidence decline triggerss an RBNZ easing."