House prices, sales up in August; institute cautious

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After showing winter weakness in June and July, the latest Real Estate Institute housing sales figures and prices unambiguously portray a stronger market, with both prices and sales activity rising.

Tuesday, September 18th 2001, 8:51PM

by Jenny Ruth

Nevertheless, institute president Rex Hadley struck a cautious note.

"The results from August are very pleasing, but it’s just getting back to normal, bearing in mind that 2000 was the worst period in 10 years," Hadley told Good Returns.

But the impact on the New Zealand economy of last week’s terrorist attacks has yet to be seen. "I do not believe there is a commentator in the world that can reliably predict the long term effect of the New York tragedy," he says.

Nevertheless, Hadley expects New Zealand’s Reserve Bank to follow the lead of the US Federal Reserve in cutting interest rates. The Fed cut its benchmark rate from 3.5% to 3% overnight, New Zealand time.

"I think there’s room to move considerably. I would be disappointed if it was anything less that half a percentage point. There’s an argument that it should be higher. Why are we a percentage point higher than Australia?" Hadley says.

New Zealand’s central bank’s benchmark rate is currently 5.75% while Australia’s is 4.75%.

The institute figures show the national median house price rose to $176,000 in August from $170,00 in both July and in August last year.

They show that the number of houses sold nationally rose to 6,976 in August from 6,122 in July and from 5,489 in August last year. Hadley says 7,000 houses sold in a month is normal.

The total value of sales rose to $1.45 billion from $1.25 billion in July and $1.08 billion in August last year.

On a regional basis, five of the 11 regions saw the August median price rise from July, five regions experienced declines and one was unchanged. Compared with August last year, the median price rose in all but two regions, Hawkes Bay and Otago.

Compared with July, activity rose in eight of the regions and fell in three. Compared with August last year, activity rose in all 11 regions.

REINZ PROPERTY MARKET REPORT

TOTAL DWELLINGS MEDIAN PRICE COMPARISONS FOR AUGUST 1996-2001

REGION	AUG 96	AUG 97	AUG 98	AUG 99	AUG 01	JULY 01	AUG 01
Northland	112,000	135,000	155,000	140,500	137,500	160,000	147,500
Auckland	220,000	233,000	225,000	230,000	137,500	239,000	240,000
Waikato/BOP/Gisborne	135,000	150,000	148,000	155,000	155,500	162,000	161,000
Hawkes Bay	122,000	119,500	115,000	115,250	135,000	135,000	123,861
Manawatu/Wanganui	106,500	95,000	95,750	101,500	95,000	105,000	103,000
Taranaki	105,000	95,500	92,550	93,500	93,000	96,750	95,000
Wellington	134,250	152,000	160,000	170,000	188,500	190,000	200,000
Nelson/Marlborough	130,000	143,500	131,000	141,500	136,875	145,000	147,750
Canterbury/Westland	130,000	144,000	140,000	145,000	143,000	136,000	136,000
Otago	97,775	87,000	92,000	104,500	99,500	94,500	101,000
Southland	85,000	83,000	75,000	77,750	73,000	84,000	95,000
NZ Total	$147,000	$165,000	$164,000	$169,000	$170,000	$170,000	176,000

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