Property indicator slips on sagging sales

House sales may be sagging but house prices held firm during the September quarter, particularly in Auckland, according to a property market gauge.

Monday, October 29th 2007, 5:00PM

by The Landlord

The Mike Pero-Infometrics Property Cycle Indicator (PCI) was just 0.37 in the October quarter, down from the June figure of 5.42.

The national indicator is made up from house prices, sales volumes and time on the market.

It showed house prices rose 12% over the year ended September, but the number of houses sold was 24% down on a year earlier and 20% lower than the June quarter on a seasonally adjusted basis.

The average time taken for a house to sell was relatively unchanged at 32 days.

Mike Pero's ceo, Jeff Staniland, said that despite the sharp dip in sales, the combination of double-digit house price inflation and relatively quick sales kept housing market momentum in the positive.

"The Auckland market once again has showed resilience over the September quarter. At positive 3.43, the Auckland market has the highest PCI in the country as a result of strong house price growth and a low average number of days to sell property."

House prices in Auckland were up 13% on an annual basis, with an average 31 days to sell a property, but there had been a 24% fall in house sales over the year.

Northland and Southland also enjoyed positive momentum with Northland seeing hefty house price growth, and Southland prices up 28% on the previous year.

Staniland said brokers had noticed the market has quietened somewhat and their clients are tending to be more careful before they purchase.

"There appears to be pressure on prices at the top end of the market, but there is still a good supply of people wanting to buy their own home and with realistic goals and good advice this is achievable."

Momentum in the Wellington property market turned negative on the back of a 19% fall in house sales and a slowdown in house price growth. Canterbury/Westland also turned negative, after an annual 24% fall in house sales.

House price growth remained elevated at 14%, and difficulties for exporters were expected to further reduce demand for property over the next six months.

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