House sales and prices robust in February
Previous tentative signs of a housing market slowdown appear to have reversed in the latest figures on sales of existing homes.
Thursday, March 18th 2004, 9:18AM
by Jenny Ruth
The Real Estate Institute figures show the national median house price rose, the number of houses sold was up and it took fewer days to sell them in February.
The national median house price rose from $227,750 in January to $231,000 in February, although that is still below November’s record $235,000. The February price was 18.5% higher than the $195,000 median price recorded in February last year, well above the 1.6% overall inflation rate in 2003.
The number of houses sold rose from 8,404 in January to 9,940 in February and that was also up on the 9,624 homes sold in February last year. The number of days homes took to sell dropped from 32 in January (and also in February last year) to 29 in February.
"The figures coming through for December and January gave the impression of a weaker market, but our advice at the time not to read too much into those figures because of the interruptions of the holiday season proved correct," says Real Estate Institute president Graeme Woodley.
"While some market consolidation may still take place during this year, the February figures suggest this will not be on a wholesale basis," he says.
Nevertheless, Deutsche Bank senior economist Darren Gibbs says allowing for seasonal effects, he estimates house sales fell 4% in February, making that the fifth consecutive monthly decline. While the raw number of sales jumped, "the usual post-January rebound was smaller than usual," he says, adding that he thinks Woodley’s comments give a misleading impression of housing market developments.
Even so, he estimates February sales were about 3% higher than in February last year and remain 37% above average turnover since January 1990.
"Thus, while softening, at this stage, the housing market can still be described as buoyant," Gibbs concedes. He adds that although the February median house price was below the November peak, "with activity levels still robust, the median days to sell indicator suggests that the November high is likely to be surpassed over coming months."
Today’s figures show of the 11 regions the median house price rose in seven, fell in three, Auckland, Hawkes Bay and Nelson/Marlborough and was unchanged in Wellington in February compared with January. The median house price was up in all regions compared with February last year.
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